Hello and welcome back to Week in Review, friends! We looked into Bezos’ Blue Origin lawsuit against NASA last week. This week, I’m writing about the NFT market’s unusual but victorious comeback.
If you’re reading this on the TechCrunch site, you can subscribe to my newsletter and follow me on Twitter at @lucasmtny. If I could, I’d probably write about NFTs every week in this newsletter. I try to keep myself from doing so because I want this newsletter to offer a picture of what’s relevant to the broader consumer tech sector, not just my narrow interests. Having said that, I’m giving myself carte blanche this week.
I can’t get enough of reading about the NFT market because it’s so strange, and the culture surrounding it is so web-native. However, in recent days, the market for digital art on the blockchain has defied all logic.
Back in April, I wrote on CryptoPunks, a platform that had amassed more than $200 million in lifetime sales since its inception in 2017. Since then, the tiny pop art pixel portraits have taken on a life of their own. It was inconceivable at the time, but the platform had $141 million in sales in the previous 24 hours, a new high.
According to crypto tracker CryptoSlam, the NFT platform will have likely crossed a mind-boggling $1.1 billion in transaction volume by the time you read this. To purchase a single one of these digital avatars, you’ll need at least $450,000 in Ethereum cryptocurrency. (That number was $300k when I sent out this newsletter yesterday.) It’s not only CryptoPunks; the entire NFT world has blossomed in the last week, with billions of dollars pouring into projects featuring monkeys, penguins, dinosaurs, and generative art in just one month.
Part of it is due to the recovery of cryptocurrency values to all-time highs, as well as a desire among the crypto wealthy to diversify their stratospheric assets without having to convert their money to fiat currencies. For those whose wealth is already over-indexed in crypto, pouring hundreds of millions of dollars into an NFT project with fewer stakeholders than the currencies that underpin it can make a lot of sense. However, a large portion of this money is likely FOMO dollars from investors who are pouring real money into NFTs, bolstered by moves like Visa’s purchase of CryptoPunk this week.
I believe it is fair to argue that this expansion is unsustainable, but it is unclear how much farther this market growth may go before investment stops or collapses. For the time being, there are no signs of a slowdown, which can be both exhilarating and risky for investors searching for something wild to invest in… And crazy this market is.
Here’s some advice from Figma CEO Dylan Field, who sold his extraterrestrial CryptoPunk for 4,200 Eth ($13.6 million currently) earlier this year.