September 29, 2022 - 5 min read
CryptoPunk #2924 First Sold for $952.75 in 2017, and 5 years later, it sold for over $4.4 million. In this article, I break down the sale, the seller, and some nuggets about the buyer that would explain why someone spent millions on a CryptoPunk despite NFT trading volumes down 75% since Q1.
That is a 6,253% increase in value in less than two years.
This sale, going from 150 ETH in November 2020 to 3,300 ETH in September 2022 has gotten a lot of attention given the decline in NFT trading volume.
DappRadar’s Q3 NFT report confirmed that NFT trading volume dropped by 75% since Q1 but top NFT projects like CryptoPunks have held their floor value in ETH during that time.
In this article, we are going to dig a little deeper into the sale to see who purchased it, how they may have purchased it and help it all make sense to those wondering why in these macroeconomic conditions, someone would spend over $4 million on an NFT.
The CryptoPunks NFT collection was released in June 2017, making it one of the oldest NFT collections on the Ethereum blockchain.
NFT projects like Curio Cards released a few months prior to CryptoPunks, but the historical element has played a big role in its rise in value over the past 5 years.
On July 11th, 2017, CryptoPunk #2924 sold for $952.75.
It was 5 ETH at the time.
CryptoPunk #2924 is the 38th rarest NFT in the collection given that it’s got a hoodie and is an ape. There were only 24 Ape species released in the entire collection.
In 5 years, CryptoPunk #2924 gained 463,043% in value.
After being purchased on July 11th for 5 ETH, the NFT was sold two days later on the 13th for 7 ETH, or $1,437.87 at the time of the sale.
It didn’t sell again for 3 more years.
In November of 2020, CryptoPunk #2924 sold for 150 ETH.
Early that year, Danny Seed Phrase, purchased the rarest CryptoPunk for 85 ETH.
On May 20th, 2020, CryptoPunk #8348, sold for $17,837.25.
This was right at the time of the pandemic’s economic effects on the world, and I would assume anyone who knew the buyer publicly probably called him crazy for making such a purchase.
A few months later, possibly with the rise of NBA Top Shot or just an instinct to collect, that same buyer acquired the hoodie CryptoPunk that would go on to sell for over $4.4 million.
The blockchain is public, so we can only see the ID of the wallet that purchased the NFT, which you can see here.
That wallet contains only 1 other NFT, a LegoPunk #162.
Using Etherscan, we can find the wallet that funded the account that ultimately purchased the CryptoPunk, which you can see here.
What’s fascinating is that it looks like this person purchased nearly 2,000 ETH in 2017 and more than 1,000 ETH in July 2017:
ETH hit $100 in May, so 1,000 ETH would have been $100,000.
The total 3,300 ETH spent on CryptoPunk #2924 looks to have been purchased for $330,000.
I’ve written before about how I thought a lot of big NFT purchases were coming from people who bought Ethereum when its price was significantly lower and this seems to be one of those examples.
This wallet was largely inactive for years until it started transferring to the purchasing wallet.
$330,000 back in 2017 is still a big number, but to this person, it may have felt less like a $4.4 million purchase because s/he had bought ETH at a lower price.
It’s positive to see such a large NFT sale in one of the most well-known and established collections.
CryptoPunks has history on its side as the first PFP project on the Ethereum blockchain and a historical artifact of a digital collectible movement.
While many of us may think Seedphrase was lucky, just look at the two sellers who probably thought they were lucky 5 years ago making a few hundred dollars in profit from free NFTs.
I don’t think anyone saw this coming, but I do have a lot of respect for Seedphrase for pulling the trigger on rare CryptoPunks in 2020 and sitting on them for years.
In my experience, it is extremely difficult to weather the highs and lows of NFT trading (this is not financial advice) and someone either needs to (1) have a lot of conviction in their purchases or (2) have truly spent money they can afford to lose and enjoy owning the NFT.
It does help to add the context that the buyer at a $4.4 million price point did purchase ETH early in its rise to popularity, but there is still the opportunity cost of taking the USD off the table, and this person chose not to do that.
Etherscan.io is a heck of a tool to use to get the full context of a purchase and I outlined 3 easy steps to check the USD value of an NFT at the time of sale here if you want to check it out for yourself.
CryptoPunks have become a part of the culture — that’s not to say the NFTs are “undervalued” or will keep going up in value. These are pretty significant jumps already, but given the ongoing interest at high valuations, I’d be hard-pressed to see a scenario where many holders fire sale these NFTs.
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