Cryptoverse: Punk apes and a resurrection of NFTs

[February 14, 2023]  By Medha Singh

(Reuters) - It's alive! The NFT market is twitching out of its torpor, defying reports of its demise.

Total NFT sales on the ethereum blockchain - which hosts most trading - jumped to $780.2 million in January from $546.9 million the month before, 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 of sales 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 nosedive along with much of the crypto world.

Nonetheless the market's been inching back since November after hitting a low of $324 million the month before, according to CryptoSlam data, with some traders betting on a future for NFTs in gaming and branding.

"We will see another 2021-style run when we are able to really bring on board the next big wave of participants into the space," said Teng Yan, lead researcher at Delphi Digital, estimating that there are between 30,000 to 50,000 people who are actively trading NFTs right now.

MYSTERY AND AIRDROPS

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 recorded on blockchain as the owner of a digital file that anyone can see online for free.

Saro McKenna, CEO of an NFT metaverse and blockchain game firm Alien Worlds, said NFTs had the potential to help companies and celebrities engage with customers and fans.

A sign saying "NFT FOR SALE HERE," is seen in a small storefront that hosts digital art collecting platform Neon?s first in-person non-fungible token (NFT) vending machine in Lower Manhattan's financial district of New York City, U.S., March 1, 2022. REUTERS/Brendan McDermid/File Photo

"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," McKenna added.

Some market players said the January rise in NFT sales volumes was also fueled by the entrance of a new online marketplace, Blur, which has drawn investor interest since it launched late last year and announced a series of free coin "airdrops" and other rewards.

NFT trading volumes on Blur's platform has totaled 101.2 million over the last seven days, slightly ahead of the $100.4 million seen on dominant marketplace OpenSea, according to data from DappRadar.

Over the past 30 days, though, OpenSea remains top with volumes of $443.98 million, versus $366 million for Blur.

BITCOIN JOINS NFT PARTY

In another non-fungible development, the novel use of the bitcoin blockchain for minting an NFT collection has caused a stir among crypto enthusiasts.

Bitcoin Punks is a series of monkey-themed NFTs and a derivative of the wildly popular CryptoPunks collection. Some media reports have indicated Bitcoin Punk NFT being sold for as much as 9.5 bitcoin, worth in the region of $205,000.

"We are going through a little bit of a hype phase for this because it's just new, it's novel, and people are rushing to try and be the first few people to mint 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 over the next couple of weeks."

(Reporting by Medha Singh in Bengaluru; Editing by Pravin Char)

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