CryptoPunk and Bored Ape Sales Surge: The Week in NFTs
Mr. Fox breaks down the meteoric rise in prices of the crypto world's two biggest digital avatar brands.
Hello all and welcome back. It is so great to have many news subscribers joining us over the last few days.
My vision for the newsletter is to act as your educator and real-time reporter for the world of NFTs. I have made it my responsibility to teach you all of the things you would know if you were in the space day-to-day. I feel privileged to be able to fulfill this duty for you.
Let’s get into the madness observed over the last week.
On July 29th of this year, the CryptoPunk floor (a ‘floor’ in NFTs is the cheapest available NFT within that specific set. In this case, the CryptoPunk ‘floor’ is the cheapest available CryptoPunk, because the ‘floor’ of anything is always the bottom) was standing at 22 Ether ($55 000 USD). On the same day, the Bored Ape floor (cheapest Bored Ape) was worth 5.8 Ether ($14 500 USD). Today, the CryptoPunk floor is 34 Ether ($93 000) and the Bored Ape floor is 14 Ether ($38 000 USD) at time of writing. (If all of this was gibberish, that’s ok. You should read my first ever article on what digital avatars and the Bored Ape Yacht Club actually are, which you can find here).
Let me walk you through how and why these prices rose so quickly.
To be fully transparent, on July 29th, at a roughly 6 Ether (aka ETH) floor in Bored Apes, I felt that my Ape was worth roughly 10 ETH, and that if I was offered that much for it, I would sell. My main issue was that at that point in time, before the events of this week, there had not yet been any major confirmations from institutions or mainstream media to justify how high the prices were for these cartoon animals. We were merely a group of passionate people who had a dream for the future of the internet, but I would’ve been lying if I said that in that moment of time there was anything concrete from sending us all the way back down to 0. At least until last week, that is.
Needless to say, I’m delighted that I wasn’t offered the 10 ETH for my Ape, because just one week later, it would be worth a staggering three times more.
This is how the week went down.
It started with major sales in CryptoPunks.
First was Gary Vaynerchuk and his $3.8 million purchase of the following Punk:
It was immediately followed by a $5.5 million purchase of a Punk in a similar style:
But that would be just the beginning. Remember when we were talking about floors just a minute ago? Well what if I told you that one buyer came in and swept a whopping 88 CryptoPunks off the floor?
What does that mean exactly?
One person bought the 88 cheapest CryptoPunks back-to-back in a matter of minutes! This anonymous person was determined to add as many CryptoPunks to their portfolio as possible. They even paid the individuals who run the Ethereum network (called ‘miners’) 5 ETH personally to hide these 88 transactions so nobody else would see them in the process and then try and outbid them. But it goes further yet!
Although they were not the speculated entity behind the “floor sweep”, a number of NFTs were purchased by none other than the biggest crypto investment fund in the world, Three Arrows Capital. Their purchases included 10 CryptoPunks, Art Blocks (read through my article here, if you don’t know what these are), and one extremely rare Gold Fur Bored Ape. See the Ape below.
This was the biggest confirmation the digital avatar space has ever received. Zhu Su, the co-leader of the fund, is regarded as one of the greatest minds in all of crypto, and so his turning to NFTs - particularly digital avatars as investment - signaled to the entire sector that these projects are here to stay.
Across July 30th and 31st, over $68 million would be spent on CryptoPunks alone. By comparison, this was roughly triple the next highest two-day period in the four year history of the project.
There are a few signs that show that this is not just hype, and that these prices are here to stay forever. For one, as prices increased, the number of CryptoPunks for sale decreased by a lot. This implies that more people are buying and holding and not cashing out.
Secondly, Punks are now moving closer to mainstream adoption. We saw this through their recent acquisition by a number of extremely popular internet influencers including FaZe Banks, Adin Ross, and RiceGum. As things move closer to the culture, they become more likely to retain their value.
Let’s recap before we move on. A lot of people bought CrytpoPunks last week, ranging from celebrities and influencers to massive institutional investors. The bottom line is this: this is more than hype, this is serious organic growth in the space.
Now the CryptoPunks floor increased by a lot, but so did the Bored Ape floor. How come?
A few reasons.
Firstly, they are in the exact same space - Bored Apes are just a less expensive version of CryptoPunks. Of course then at the very least, if people see the demand for Punks go up, the demand for Apes will also go up. Remember that these two are head and shoulders above the rest when it comes to the digital avatar sector. No other project is even close. They make up over 99% of all dollar sales in the history of digital avatars.
Secondly, there was legitimate investment in Bored Apes. As I stated above, although there wasn’t nearly as much of a targeted effort to buy Apes as there was in Punks, Three Arrows Capital did in fact buy an Ape for $237 500 USD, signaling to the market that they are also one of the best assets to be holding in all of NFTs. Along with the Ape Three Arrows Capital purchased for 95 ETH, two Apes were sold for 100 ETH, and another for 95 ETH. These four transactions make up four of the top six highest ever Bored Ape sales.
Finally, the biggest factor by far that contributed to the increased prices of Bored Apes was the announcement that one of the biggest auction houses in the world, Christie’s, would be auctioning Bored Apes in Hong Kong in the fall. I was actually the one to break the news to Twitter:
This is big news for two reasons.
One. This is confirmation that the Bored Ape Yacht Club is here to stay. This is official demand from a prestigious company which recognizes Bored Apes as important pieces of the art and collectible world. Further, the future price potential of Bored Apes will only go up when Christie’s exposes their extremely wealthy clients to this new type of asset.
Two. In another form of confirmation, Bored Apes are following the exact path walked by the only project bigger than it, CryptoPunks. On May 11, 2021, 9 CryptoPunks were auctioned and sold at Chrisitie’s for $17 million. That same bundle today would go for many multiples more. The prospects of multi-million dollar Bored Ape sales at Christie’s are now attracting more and more people to the project. They saw how prices exploded in Punks and are not going to let the same opportunity slip away with Apes.
Alright. That was a lot of information. If you’re new here, don’t feel overwhelmed, it’s usually not this much to handle.
All of what I told you is fine and dandy, but what do I think it means for you?
I think it’s important for you to know what I just told you for a number of reasons. The most important being that NFTs will change every single sector in the world, so it’s vital that you know about every step of their history along the way so that when it reaches your particular field of work, you are better equipped than anybody to navigate the change.
I think the other reason is to encourage you to start building your NFT and crypto portfolio. Create your MetaMask account and begin buying some Ether. If you’re confused on the process I explain it in this article. There are a number of new projects dropping at low prices for you to experiment with. One of my favourites coming up is Dogs Unchained, I go through the whole project in one of my latest articles - you can find it here. Finally, if you want to do your own research, I explain how to join the NFT community in my most recent email (LINK).
Our society is going to flip on its head as a result of the innovation happening in crypto right now. This will likely be the greatest wealth creation opportunity of our lifetime, all we have to do is keep learning.
If you’re new here, subscribe to receive these emails directly to your inbox if you so choose. If you’re already subscribed, maybe consider sending the newsletter to somebody you think would make the most of the opportunity we have in front of us, or at the very least, someone who deserves to know about it.
And down the Rabbit Hole we continue.
Mr. Fox.