Punk monkeys and a resurrection of NFTs
(Our weekly analysis of the wild world of cryptocurrencies)
By Medha Singh
February 14 (Reuters) – It lives! The NFT market is moving out of its torpor, defying reports of their demise.
Total NFT sales on the ethereum blockchain – which hosts the most trading – jumped to $780.2 million in January from $546.9 million the previous month, according to market tracker CryptoSlam.
Digital art collectibles were among the big hits. “Bored Ape Yacht Club #5840” — a cartoon monkey shooting green lasers from its eyes — went for $822,730, for example, while “CryptoPunks #7674” — a pixelated character smoking a pipe — fetched $433,555.
The average NFT sale price was a more modest $372.38, according to CryptoSlam.
The $780 million sale seen last month is a fraction of the roughly $5 billion seen last January and $2.7 billion in May, before the market took a non-fungible dive along with much of the crypto world.
Nevertheless, the market has retreated since November after hitting a low of $324 million the previous month, according to CryptoSlam data, with some traders betting on a future for NFTs in gaming and branding.
“We will see another 2021-style race when we can really bring the next big wave of participants into the space,” said Teng Yan, principal researcher at Delphi Digital, estimating between 30,000 and 50 000 people who are actively trading NFTs right now.
MYSTERY AND AIR DROPLETS
Despite the nascent bounce, the future of non-fungible tokens remains shrouded in mystery. Few crypto experts expect a repeat of the 2021 boom anytime soon. Some doubt the long-term appeal of paying to be registered on the blockchain as the owner of a digital file that anyone can view online for free.
Saro McKenna, CEO of an NFT metaverse and blockchain gaming company Alien Worlds, said NFTs had the potential to help companies and celebrities engage with customers and fans.
“The most promising aspect of this technology will be when more and more of the Disneys and Dua Lipas of the world increasingly turn to NFTs,” added McKenna.
Some market participants said the increase in NFT sales volumes in January was also driven by the entry of a new online marketplace, Blur, which has attracted investor interest since it launched late last year and announced a series of free coin “airdrops” and other rewards.
NFT trading volume on Blur’s platform has been 101.2 million over the past seven days, slightly ahead of the $100.4 million seen on dominant marketplace OpenSea, according to data from DappRadar.
In the last 30 days, however, OpenSea still tops with volumes of $443.98 million, compared to $366 million for Blur.
BITCOIN JOINS THE NFT PARTY
In another non-fungible development, the new use of the bitcoin blockchain to create an NFT collection has caused a stir among crypto enthusiasts.
Bitcoin Punks is a series of monkey-themed NFTs and a derivative of the very popular CryptoPunks collection. Some media reports have indicated that the Bitcoin Punk NFT is selling for as much as 9.5 bitcoins, worth around $205,000.
“We’re going through a bit of a hype phase for this because it’s just new, it’s new, and people are rushing to try to be the first to produce NFTs on bitcoin,” said Teng Yan at Delphi Digital, noting there was no marketplace for bitcoin NFTs, with all transactions done over the counter.
“The hype will die down in the next couple of weeks.”
(Reporting by Medha Singh in Bengaluru; Editing by Pravin Char)
