Cryptopunk NFTs are increasingly being held in top investment portfolios and you should be considering them in yours. Even if you don’t understand digital art yourself, it’s important to realise that younger age groups value digital goods perhaps as highly as physical goods. Make your investment decisions accordingly. As I write this, I’m aware of numerous world renowned brands developing NFT and metaverse strategies for their customers and fans.
Cryptopunks are amongst the very first NFTs and certainly the first to gain mass popularity as a collection. Created in 2017 by Larva Labs, Cryptopunks are a set of 10,000 generative, pixel art digital collectible avatars. Originally given away for free, they’ve since reached prices as high as $16.9 million for some of LL’s own collection and even the most common trade for $30–50k each.
At the time of writing one of my own Cryptopunks, the Masked Alien, is on sale at Sotheby’s — where you can bid online now. Particularly representative of the NFT boom in 2021, this is known as the Covid Alien. Only 9 Cryptopunk aliens were ever created and this is likely to be the last one to change hands for a long time since over half of them were sldrecently, 3 for between $7.5m and ~$14 million.
I’m selling in part to raise the profile of important NFTs since, as one of the first ever proponents of NFTs, I feel it’s important to set historical markers to look back on.
1. Cryptopunks are revered by Crypto Investors
While this may sound obvious, it needs to be restated because investors often miss the most important points — market dynamics and the crypto wealthy. When crypto is going up, particularly due to decentralised finance, all desirable NFTs, but especially Cryptopunks, significantly gain in value. As investors look to do something with their gains they want to stay in crypto — as well as make their mark with their peers. Cryptopunks will always be the very best way to do both.
All punks will benefit but the very top ones, such as aliens, will demand a premium from increasingly wealthy crypto investors. Even if you don’t understand crypto or digital art, this is key to understanding the current and future market. Crypto dips may lower NFT prices generally, as you would expect, but the top punks simply don’t go to market during these periods.
In the future we’ll also see more crypto investment groups buy together. Flamingo DAO, for example, already own one alien Cryptopunk.
2. Cryptopunks Generate Yield
Unlike many NFTs and virtually all art investments in the real world, Cryptopunks can generate yield. There are a number of projects in development which will allow you to benefit from owning Cryptopunks, whether loaning them out or by providing free NFTs. Larva Labs themselves gave punk owners Meebits for free, some of which traded for hundreds of thousands of dollars and we’ve also seen collectible digital and physical sneakers from RTFKT.
3. Cryptopunks are VIP Passes
Cryptopunks are becoming the VIP passes of the Internet. Although still mostly known within the crypto world, we’re starting to see how punk owners are seen as a special community. With teenagers and twenty somethings now thoroughly engrossed in virtual worlds and a rapidly developing metaverse, digital VIP passes are inevitable. In the future Cryptopunks will be in demand from this age group as they mature, as will other respected NFTs.
4. Cryptopunks are Avatars
Not only are punks VIP passes but they’re avatars that can be used in any domain. The simple pixel art style means they work across all social media yet are now also being voxelised for use within virtual worlds. Look around crypto Twitter or Clubhouse and you’ll see Cryptopunk avatars. Some of those have become synonymous with personalities and the provenance can attach additional worth. These are key drivers of long term value, particularly as people become so attached that they’ll no longer sell them on, gradually reducing already scarce supply. I hold 2 punks that I would never, ever sell.
5. Cryptopunks Came First
Whilst they weren’t the first ever NFTs, Cryptopunks were the first ever significant NFT collection. This is a critical point when looking at sustainable, long term value. Other collections exist, and may sustain success over a long period, but punks are already 4 years ahead of them and will always be seen as the parents of all NFT collections and metaverse avatars.
6. Cryptopunks are Liquid
Cryptopunks have high liquidity compared to other NFTs and physical art. Whether selling on Larva Labs marketplace (zero fees), or wrapped punks on OpenSea, you’ll always find buyers. Decentralised finance protocols like NFTX allow you to instantly buy and sell floor punks, and sometimes higher value ones, and we’re also seeing development of projects that allow owners to fractionalise Cryptopunks to distribute ownership across many buyers.
Know Your Punks
If you’re going to add Cryptopunks to your portfolio then be sure to understand how to value them — Dapp Radar published this handy guide. Feel free to get in touch if you have any other questions, especially if you’re new to crypto or NFTs.
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