Top Crazy NFT Sales Till Date: Madness or Opportunity?

The interest in the crypto space has been ramping up for some time now. Tesla, Elon Musk-owned electric carmaker, is the latest blue-chip company to leap after acquiring 1.5 billion USD bitcoins in January 2021 and outlined its plan to accept the asset as payment in the upcoming future. The development followed a discussion between Elon Musk and fellow billionaire Michael Saylor (1), whose organization made its own 10-figure Bitcoin purchase last year.

Naturally, Tesla’s announcement caused excitement across the crypto market as regular investors prick up their ears. So now, what is next for the world of provably scarce digital assets and permit-free blockchains?

While many silk-stocking hedge funds are likely to copy the playbooks of Microstrategy, Tesla, Mass Mutual, and other leading digital funds and accumulate Bitcoin, several everyday investors and curious digitalists are gazing towards the huge altcoin market to uncover the next big thing.

Beyond altcoin, there are several opportunities in the NFTs, Non-Fungible Tokens. Provably scarce digital assets of a range of commodities such as gaming collectibles, artworks, and even real estate, both in the virtual and physical space (2).

First, let’s look at some details about NFTs.

What is an NFT?

NFTs are digital assets that exist on a blockchain. The blockchain serves as a public ledger and allows anyone to verify the asset’s ownership and authenticity.

Unlike most digital pieces that can be reproduced endlessly, each NFT has a unique digital signature, making it one of a kind.

They are usually bought with the Ether cryptocurrency or in dollars, and the blockchain keeps a record of all transactions. While anyone can access the NFTs, the buyer has the status of being the official owner. Let’s consider it as a kind of digital bragging right.

Difference NFTs Types in Existence

There are all kinds of digital objects that exist as NFTs. It can include anything from images, text, videos, music, even tweets.

While digital art has only witnessed high-profile sales, fans are collecting and trading NFTs related to their favorite players or teams in sports.

For instance, the National Basketball Association allows sports enthusiasts to purchase collectible NFTs in the game’s moments as video highlights via its Top Shot platform.

Though others can see these highlights for free on platforms like YouTube, people are purchasing the status as a particular NFT’s owner, which is distinctive because of the digital signature.

It is worth highlighting that patches of land in virtual world environments or exclusive use of a cryptocurrency wallet name are also sold as NFTs (3).

The NFTs Market Growth

Even though NFTs have grown in popularity this year, it has been trading since about 2017. In February, monthly sales on Open Sea, an NFT marketplace, hit 95.2 million USD, up from 8 million USD in January.

The total NFT trading volumes on the Ethereum blockchain amount to more than 400 million USD, and nearly half of it was in the past 30 days, as per NonFungible.com, an NFT marketplace data aggregator.

The NFTs Rise and Risks

The coronavirus pandemic and resultant worldwide lockdown attribute some way to the rising popularity of NFTs as it forced people to spend more time in their homes on the internet. Moreover, NFTs are also a way to own possessions that owners’ online friends can see.

For others, the attraction lies in rapidly rising prices and the idea of big returns. In recent years, there has also been a surge in crypto millionaires with Etherum to spend.

Enthusiasts look at NFTs as the future of ownerships with all kinds of properties, including event tickets, and houses will eventually have their ownership status tokenized in this way.

For artists, NFTs would solve the issue of monetizing their digital artworks. They believe that it would allow them to get more income, as artists can get a royalty every time the NFT changes hands after the initial sale.

However, considering the fact that anyone can create NFTs, the scarcity of each item does not guarantee value, and if the hype dies, losses can stack up.

And in a market where several participants use pseudonyms, there is also a risk of fraud (4).

Mixed Market opinion on NFTs

For the backers, it represents the future of collectibles and the expanding digital resource economy. They see it as a means by which users can prove ownership of goods, either physical or virtual, through unique digital tokens recorded on the blockchain.

On the other hand, critics have been less than convinced. They are citing concerns focused on NFTs’ inability to stimulate the real world volume, unlike other crypto assets.

At present, the weekly volume of the NFT space stands at 8.2 million USD. In contrast, Bitcoin’s weekly trade volume alone has surpassed 500 billion USD during January 2021 (5).

Critics allege that NFTs like digital paintings are merely purchased and held rather than traded. However, the eventual maturation of the industry could see an emergence of thriving markets. After all, cryptocurrency also once lacked the imminent liquidity and infrastructure to attract investors like Saylor, Musk, and Paul Tudor Jones.

With the Etherum and blockchain protocol cryptocurrencies well-established, we may see the NFT landscape represent blockchains’ logical next frontier. If one could put money on a blockchain in the form of borderless digital assets or collateralized fiat-pegged stablecoins, why can’t one do the same with other commodities?

Of course, one can, and several are. The big question is whether NFTs can generate enough interest to follow in the slipstreams of bitcoin and altcoins and offer an appreciable return on investment. More importantly, it would allow the average investors to access fractional investments in assets that are the domain of deep-pocketed collectors and high-end auction houses.

Entry in Hollywood

With the billionaire Mark Cuban selling NFT’s of his tweets for more than 1k USD a pop (6) and Lindsay Lohan shilling Bitcoin to her Twitter followers (7), it is only a matter of time until the celebrity elite enter the NFT party.

A project which is hoping to get the elites onboard is Ethernity. It is auctioning digital artwork featuring stars from sports, crypto, and the investment world, with each one represented as an NFT. The collection features the blessing of public figures as Paolo Maldini, an Italian soccer legend, Michael Rubin, Philadelphia 76ers billionaire, and the Winklevoss twins (8).

Ethernity, rolled out by an early bitcoin investor, Nick Rose Ntertsas, claims that it will be a platform where stars from the globe, including artists, athletes, celebrities, can lend their images to limited-edition artworks. And the proceeds would go to the star’s chosen charity. Rose further stated that they have already accumulated 75 celebrity-backed artworks, ready for auction in the coming weeks.

However, if we set aside the charm of star power for a moment, can these intangible goods ever be as desirable as their physical counterparts, especially where the paintings’ aesthetics are concerned?

Hashmasks (9) is another recent success story that underscores the NFTs’ potential. It is a venture whose gaudy NFTs are coveted part collectible and part digital portrait. In any case, the colorful NFTs were alluring enough to attract 10 million USD worth of ETH within four days. According to a Twitter handle, ‘no two titles are the same, providing collectible names the uniqueness of.’

Meanwhile, a single ultra-rate CryptoPunk NFT sold for 605 ETH, about 762,000 USD at the time. We can call it a sort of early interest that nurtures bitcoin bull Anthony Pompliano’s belief that the digital art market would further grow, in time, to turn larger than the physical art market cap (10).

The Most Crazy NFTs Art Sales So Far

Here are the top 10 NFT Art single sales between the year 2020 to 2021 based on the ETH price (11, 12).

Beeple’s ‘The First 5,000 Days’

It sold for a record 69,346,250 USD on March 11, 2021. Notably, it was the first piece of purely NFT artwork, a major auction house.

CryptoPunk #3100

It was bought on March 11, 2021, for 4,200 ETH, about 7,584,485.82 USD. CryptoPunk#3100 had broken the Punk 7804 record set on the previous day because of the increased ETH prices.

CryptoPunk #7804

It was sold on March 10, 2021, for 4,200 ETH, which is the same as Punk 3100. However, at the time of sale, ETH was valued at about 7,566,173.88 USD.

CryptoPunk #6965

It was sold on February 19, 2021, for 800 ETH. It is currently worth about 1,608,032 USD, valued at 2,010 per ETH.

CryptoPunk #4156

It was sold on February 18, 2021, for 650 ETH. It is currently worth about 1,306,526 USD, valued at 2,010 USD per ETH.

CryptoPunk #2890

It was sold on January 24, 2021, for 605 ETH. It is currently worth about 1,216,074 USD, valued at 2,010 USD per ETH.

CryptoPunk #6487

It was sold on February 21, 2021, for 550 ETH. It is currently worth about 1,105,500 USD, valued at 2,010 USD per ETH.

Hashmask 9939

The Hashmask with the name ‘sex’ was sold on February 3, 2021, for 420 ETH. It is currently worth about 844,216 USD, valued at 2,010 USD per ETH.

CryptoPunk #2140

It was sold on February 22, 2021, for 400 ETH. It is currently worth about 804,000 USD, valued at 2,010 USD per ETH.

Genesis by TrevorJonesArt & Jose Delbo

It was sold on October 17, 2020, for 302.5 ETH. It is currently worth about 607,037, valued at 2,010 USD per ETH.

(Note: Since the NFT market moves incredibly rapidly, it is possible that some of the items on the list would have been moved around by the time you read this article.)

Growing Use Cases of NFT

NFT is not limited to art. Two weeks ago, the founder of Kenetic, a blockchain investment firm, Jehan Chu, clocked more than 84k USD for 680K Handshake NFTs, entitling the bearer to issue (13), .NFT web domain extensions through the Handshake blockchain. Jehan Chu called NFTs the ‘true missing link between virtual and physical objects.’ He further stated his belief that they could transform business, finance, culture, and culture.

Apart from being provably scarce, NFTs benefit from transparency thanks to their recording on a public ledger. It adds a layer of protection to collectible assets that people seem to be lured to. Several have speculated that NFTS could play a pioneering role in DeFi, the decentralized finance sector. Moreover, there is already proof of concept for it in the form of Alpaca City’s Ethereum-based virtual world (14).

Earlier today, Jack Dorsey, the CEO of Twitter, sold his first tweet as an NFT for more than 2.9 million USD. It was sold through an auction on a platform called Valuables, owned by a US-based firm, Cent.

According to Cent’s confirmation, Sina Estavi, Malaysia-based CEO of Bridge Oracle, a blockchain firm, purchased the tweet for 1630.58 ETH (15).

It is worth highlighting that Alpaca’s November token pre-sale sold out within 15 minutes and raised more than 1k ETH (16). Owners can ‘breed’ Alpaca NFTs and enhance token’s utility, a game-changer for the NFT market. It includes NFT-collateralized loans, interest-bearing accounts, and more. And as more NFT holders will want to send and receive assets via disparate blockchains, interoperability would also be the key.

DeFi primitives exist on established blockchains such as TRON and Etherum at present. TRON recently rolled out its own NFT standard (17), TRC-721, which enables users to track and transfer tokens on the high-throughput platform. It would let people on both sides of the equation see the value of NFTs. While buyers are rushing to get skin in the game, companies offer accessible and secure NFT protocols.

Etherum, the smart contract network, is home to several NFT projects such as Hashmask, Decentraland, and CyrptoPunks. Decentraland is a digital realm where gamers can explore and interact with others. They can also purchase plots of virtual land and create their own revenue-generating enterprises. In essence, it is a blockchain-based The Sims’s iteration.

We will have to see if the pandemic’s effects would continue to be felt in the real world, and more of us could be donning a VR headset and venture into these worlds to make our NFT fortune.

What’s Next?

It isn’t easy to gauge the NFT market’s potential. It is most likely to depend on the evolution and success of the AR/VR gaming market, the relative stability of gas prices, especially on Ethereum, speculative investor interest, and the possible surge of dedicated NFT-based blockchains to power growing ecosystems.

Nevertheless, critical questions are not going to go away soon. Especially when NFTs are yet to demonstrate their ability to retain value over time. Even though volume is growing, it is still comparatively low. NFTs remain highly illiquid as purchasing one is easy; selling one depends on finding a willing buyer who has the same aesthetic sensibilities.

When the hype goes down, no one would want to be left holding an unwanted NFT. Though, for now, the place is in full swing. In February, the NFT record was smashed when a user purchased nine virtual land plots for 1.5 million USD (18).

Digital real estate is now officially more expensive than physical ones. It may seem like madness, but it is collective mania that an increasing number of crypto-savvy investors share.

Capitalism is a social system, and digitalists recognize the masses’ power in maximizing the utility of monetizing all things in the virtual world. And as more people across the globe get to connect to the network, it is a highly likely scenario that everything that can be tokenized will be.