CryptoPunks - The Finest Blue-Chip NFTs?

CryptoPunks - The Finest Blue-Chip NFTs?

Key Takeaways

  • Since its launch in 2017, CryptoPunks V2 has generated $2.9 billion in volume
  • The collection strongly resembles tangible luxury goods, namely Hermès bags
  • While the larger NFT market has fallen, CryptoPunks has maintained a consistent floor price in ETH terms

Unsurprisingly, NFT volume and users exploded across all categories in the 2020 cycle. Volume on OpenSea rose from $32 million to $15 billion between January 2021 and January 2022. CryptoPunks, one of the first NFT collections on Ethereum, has done $2.9 billion in volume since its introduction in June 2017.

 daily nft volume

NFT volume is down across all chains and marketplaces in the current bear market, but CryptoPunks has maintained its appeal by staying at a consistent floor price inside the current NFT downmarket.

Punks Through The Ages

Punks were influenced by the London punk and cyberpunk movements, as seen by the pixelated avatar designs. Initially, 9,000 V1 Punks were given out for free since petrol costs were so low, and the crew kept just 1,000. However, Punk customers could withdraw their money from the deal rather than the seller because of a single-line mistake in the contract. When the problem was discovered, the team released Punks V2, the CryptoPunks we know today.

Punks, the epicenter of the NFT revival, drew much interest, notably from whales, celebrities, and traditional banking. Larva Labs benefited handsomely from this collection until March 2022, when it transferred the Punks IP to Yuga Labs and granted all Punks owners commercial rights.

The CryptoPunks V2: The Ultimate NFT Collection

Among the most recent significant events for CryptoPunks are:

  • Punk #9998 generated an alert for a $532 million sale in October 2021
  • Noah Davis, Christie's head of digital sales and the man behind the Beeple auction, resigned at the end of June to join Yuga Labs, where he will work on the Punks collection. The floor reached its pinnacle 24 hours before the announcement, sparking concerns about insider trading
  • On July 15, Nick Tomaino - the founder and general partner of cryptocurrency-focused fund 1confirmation paid $3.3 million for Punk #4156

According to Nansen's research, the NFT market is adversely associated with the crypto market. The Punk floor was 69 ETH while ETH's ATH was near $4,700. When ETH reached a low on July 1, the Punk floor recovered to roughly 69 ETH. Though the BAYC floor has been rising, Punks have maintained a consistent ETH floor after a few drops last month.

price for buy cryptopunks

The Value of Punks with Traditional Luxury Goods

CryptoPunks has a strong history, community, and cultural support. Individual Punks, for example, have spawned a slew of Twitter profiles with large followings. The accounts are beneficial not only for NFT culture but also for internet culture in general. The collection will only grow more precious and sought after over time, as seen by the price of the Kelley bag from the Hermès luxury brand.

Hermes Kelly price overtime

CryptoPunks' Financialization

The majority of NFTs are illiquid assets. Several projects have been working in recent months to enhance the financialization of NFTs through lending and liquidity. NFTx is one such site that allows users to deposit their NFT in exchange for vTokens. A Punk deposit, for example, would result in issuing a PUNK token. PUNK tokens can be deposited in a liquidity pool to generate NFTx protocol fees or SushiSwap trading fees, vTokens can also be used to purchase another item from the vault. There are 142 Punks in the vault with a TVL of $12.5 million and a liquidity APR of 4.5%.

1st time buyer enter NFT market

The Bear Market Slowdown

With the introduction of improved assessment systems, NFTs are on their way to being less valued by speculation alone. Despite having a head start in the NFT market, Punks had minimal volume until 2020. Bored Ape Yacht Club is the second most extensive collection, with a total value of $2.1 billion. Although the Punks had a slight first-mover advantage, the NFT user market was non-existent when it initially started. New customers appear today, and other collections can reach CryptoPunks' volume and trustworthiness.

Final Thoughts and Personal Opinion

Even without the extra excitement of DAOs, tokens, or active community campaigns, CryptoPunks has succeeded. Unlike the rest of the NFT market, Punks have maintained a consistent price, making them a secure investment in a tumultuous climate.

Besides that, Punks need to be careful that their unique position may be flipped by other well-known NFTs like Bored Ape Yacht Club. Additionally, the NFTs trend is just in the beginning stage, which will be explosive along with the bull market. Eventually, some of the tokens will be advantageous to the NFTs trend, which the community should follow, such as FLOW, MANA, APE, and SAND.

Top NFT by market cap
Top NFTs token by market cap

Source: Messari, Dune Analytics, BagHunter and Coinmarketcap

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