- As of September 1, CryptoPunks sales and exchange has generated $1.18 billion in total trading volume.
- Floor price has plunged 33% from its peak, hit 94.5 Ether on September 2.
- Universal Talent Agency has signed the CryptoPunks collection to represent them for film, TV, video games and publishing projects.
- Analysts continue to debate whether non-fungible token collections are a fleeting fad or long-term investment opportunity.
Non-fungible token collection CryptoPunks garnered mainstream media attention with Visa's $150,000 purchase in the last week of August. Since then, the floor price of one of the oldest NFT collections has dropped consistently.
Long-term investment opportunity or fad, the NFT debate ensues
The Ethereum-based project from 2017 CryptoPunks became widely popular as the second most popular non-fungible token collection. Several "Punks" sold in excess of $1 million each, and the algorithmically generated pixelated avatars caught the attention of payments giant Visa.
Visa added a desirable CryptoPunk to its existing collection of historic commerce artifacts. The financial services firm spent $150,000 on one "Punk" that belonged to a collection of 10,000. Since this purchase, traders and NFT collectors expected the floor price (lowest price) to rise.
Interestingly, the floor price has dropped consistently, hitting a new low of 94.5 Ether on September 2.
Nigel Green, CEO of global advisory firm deVere, states:
The market for NFTs hit new highs in the second quarter, with $2.5 billion in sales so far this year. As the big hitters pile in, their capital, expertise, and reputational pulling power will attract a growing number of other investors – both retail and institutional looking to get into the market.
Universal Talent Agency, one of Hollywood's top 4 management agencies, now represents CryptoPunks. The "Punks" are set to sign film, TV, video games, publishing and licensing deals.
Matt Hall, the co-founder of Larva Labs, the company that created the CryptoPunks, said
We are excited to work with UTA for the benefit of the entire community connected to our projects. Not only for the exciting opportunities to bring them wider exposure, but to help protect their growth and value for the long term.
NFT collectors expected the floor price of the Punks to explode; however, it has continued to drop, fueling concerns of long-term investors and institutions.
There is no way to predict the price trajectory of NFTs since factors such as demand and supply do not influence prices. Instead, digital art or collectibles owners set any price (based on their profitability) higher than the floor price of a given NFT collection.
Pseudonymous analyst @AltcoinSherpa attributes the dropping floor price of non-fungible tokens to the rise in Ethereum prices. NFTs may not be able to outperform if ETH continues an upward climb.
For those #NFT doubters who laugh at NFTs going down:
— Altcoin Sherpa (@AltcoinSherpa) September 1, 2021
-NFTs are here to stay; infrastructure/hype/$ around this space is too big to ignore. Accept this reality.
-Strong NFTs/1s that have lots of $ in them (rocks/punks/etc) will probably be ok +retain value.
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