A recent rise in the price of Non-Fungible Tokens (NFTs) has shocked the world and caused an enormous upheaval in the crypto market.
With the recent adoption of NFTs by traditional auction experts like Sotheby’s and Christie’s, the niche of crypto art has a massive potential to keep growing at unprecedented levels. Amid this trend, the price of CryptoPunks is also rising exponentially.
In this article, you will find out why the floor price for CryptoPunks is rising and the reasons behind the recent NFT bull market, which could signal that it’s a good idea to long ETH on Bitlevex, to take advantage of the current narrative.
What are Non-Fungible Tokens?
In essence, a Non-Fungible Token (NFT) is a unique unit of data stored in a blockchain. It’s possible to associate an NFT with a particular digital or physical asset. For example, you can create an NFT and associated it with the ownership title of a physical property.
Also, NFTs can represent an exclusive license to possess and use an asset for a specified purpose (e.g., copyrights). This way, only the official owner of a specific NFT has the right to trade or sell the token and the associated license to use, copy or display the underlying asset.
Unlike Bitcoin and other cryptocurrencies, NFTs are not interchangeable. To further explain this concept, imagine you have a 50-dollar bill. You would not mind exchanging one 50-dollar bill for five 10-dollar bills, as the value would be the same.
Similarly, all bitcoins are equal, meaning that if you have a bitcoin, it does not matter what bitcoin it may be, as they are all the same. On the other hand, each NFT represents a different underlying asset, which means none of them is equal.
What Are Crypto Punks? – A Brief Explanation
Launched back in 2017, CryptoPunks was one of the pioneering NFT projects on the Ethereum Network. It was developed by Larva Labs, an American studio consisting of two Canadian software developers – John Watkinson and Matt Hall.
Initially, the project was conceived as an experimental idea. At the time, many developers were discussing the non-financial use cases for blockchain technology, especially for purposes associated with art, leisure, and entertainment.
Inspired by scenes during the heights of the Punk era during the ’70s and ’80s, as well as the cyberpunk movement and other influences (Blade Runner, Daft Punk, etc.), the project relied on the concept of digital art concept to popularize the ERC-721 standard for NFTs.
One of the very characteristics of CryptoPunks is their scarcity – there are only 10,000 unique units of the collection. In total, there are 6,039 male characters, while there are 3,840 female characters.
Larva labs generated each CryptoPunk algorithmically, meaning that no character is equal to another. Although no character is equal, some have exclusive traits that are rarer than others, making them much more coveted.
What the Rise of CryptoPunks Means to the NFT Industry? – An Overview
It’s hard to imagine that the CryptoPunks were originally released for free. Back in 2017, anyone with an Ethereum wallet could claim a CryptoPunk on his/her own.
As there will never be more than the original 10,000 CryptoPunks, the rise of an NFT boom and the increasing demand for unique characters made them worth a fortune these days.
Recently, an anonymous individual put up for sale a rare CryptoPunks for a hefty amount of $90.5 million. If completed, this will be the biggest CryptoPunk sale ever made.
According to Larva Labs, the NFT for sale is the CryptoPunk 3100. The NFT displays an alien with a headband, which had previously been sold for $7.6 million. It’s worth noting that the project is a collection of thousands of pixelated faces, which can range from humans, zombies, apes, or aliens.
Nowadays, some CryptoPunks are among the most expensive NFTs ever sold. According to the NFT tracker – CryptoSlam – in July there were 1,395 sales, totalling $ 135 million paid in ether (ETH). The average price of each CryptoPunk is around $100K – a much higher average than most NFT projects.
The listing of the CryptoPunk 3100 is perhaps indicative of the surprisingly high prices that some Punks and other NFTs have shown so far. Zombie Punks are considered rare, which made them the most recent acquisitions in the NFT fever – one sale concluded four months ago, making only two others available for sale.
As NFTs act like deeds of ownership to digital items, including art pieces, music, videos, and many more, they are the ultimate representation of scarcity in terms of asset valuation. With the recent rise in the NFT market, the most affordable CryptoPunk today costs more than $100,000 worth of ETH.
Although many may believe it’s just another hype train, the NFT niche has been experiencing a solid climb, collecting high-dollar sales and a huge transaction volume.