Meet CryptoPunks – A New Generation of Collectables

Human beings have an affinity for collecting things. When people list their hobbies, it’s not unusual to find someone who loves collecting something. From stamps to baseball cards, it seems from generation to generation, while the collectable may change, the behaviour is a constant.

It should come as no surprise then, as we head further into the digital age (and in particular the cryptocurrency age) the object of latest collectable lies within the digital realm.

NFTs are in vogue right now. And it’s making a lot of people very rich. NFTs – or non fungible tokens – include a wide variety of digital content, from music and art to YouTube videos.

One NFT project which is breaking into the mainstream culture is called CryptoPunks.

What is CryptoPunk?

A CryptoPunk is a little pixelated portrait of a digital character. Some of them wear pirate hats, others aviator glasses, and some are even smoking pipes.

While this may seem worthless and pointless to many people, in the world of crypto, CryptoPunks signify early investment into NFTs, personal style and wealth.

CryptoPunk was one of the very first non fungible tokens (NFTs) released on the Ethereum blockchain in 2017. Now they are some of the most sought after NFTs in the world. In fact, two of them - CryptoPunk #3100 and CryptoPunk #7804, contained in a project called Everydays: The First 5000 Days, sold for over US$7.5 million apiece.

CryptoPunk #7523, Image source: © Sedovukr | Megapixl.com

The CryptoPunk seen in the above image is CryptoPunk #7523 and is one of nine “Alien Punks”. The earring knitted cap and surgical mask are all accessories that some have and some don’t.

What is their value?

CryptoPunks were initially given away for free when launched, and now even the least expensive collectable will cost six figures, with the most valuable costing millions.

In May 2021, an auction held by Christie’s saw a bundle of nine CryptoPunks selling for just under US$17 million.

On August 23, 2021, financing giant VISA further legitimised the CryptoPunk brand when it announced on Twitter that it had purchased CryptoPunk #7610 – a digital character with green eye makeup and a mohawk - for US$150,000.

Visa tweeted that they’d built a collection of commerce “artifacts” over the past 60 years and now they’re entering the new era of NFT-commerce through purchasing the CryptoPunk.

What does this do to Ethereum?

Ethereum is the second largest crypto in the world after Bitcoin. This year, however, has seen Ethereum significantly close the gap on Bitcoin in terms of market capitalisation.

On January 1, 2021, Bitcoin held around 70.5 per cent of the total market share, while Ethereum held around 10 per cent. Today Bitcoin holds a market share of more than 43 per cent, while Ethereum’s has shifted up to 18 per cent. This is a significant shift, and a lot is due to NFTs selling on Ethereum’s platform.

Moreover, Ethereum’s price has experienced a marked rise since the beginning of the year where it sat at around US$738. At the time of writing, on September 1, 2021, Ethereum’s price sits at US$3,453.

To give an idea of how much NFT sales have helped Ethereum’s overall performance, during the first six months of 2021 alone, the NFT market registered AU$$3.4 billion in sales.

Furthermore, to give an idea of CryptoPunk’s contribution to those overall NFT sales, more than 2,500 CryptoPunks were sold for a combined sum of more than AU$$640 million in August alone.

Bottom Line

The previous few months have seen the emergence of NFTs as a force to be reckoned with in the financial space. As more major companies, like VISA, get involved with NFTs, they’ll only continue to grow, not only in collectables but also in music, art, and entertainment.