Why Are CryptoPunks So Expensive? The OGs of NFTs Gain Serious Value
You might not have seen CryptoPunks coming, but that doesn't mean these NFTs don't have serious monetary value. Why are they so pricey?
Aug. 6 2021, Published 11:52 a.m. ET
By July, five of the 15 most expensive NFTs sold so far were CryptoPunks. The priciest of the bunch was CryptoPunk #3100, which sold for 4,200 ETH or $7.58 million. The digital asset started at a value of $76 back in 2017, and its worth skyrocketed in the years since.
Why are these animated characters so expensive as non-fungible tokens? How can you snag a CryptoPunk of your own?
What are CryptoPunks and why are they so valuable?
There are exactly 10,000 CryptoPunk characters on the Ethereum blockchain. These characters are collectible and have been released into the world by a company called Larva Labs.
Larva Labs' founders are two Canadian software developers Matt Hall and John Watkinson, who also created Autoglyphs.
CryptoPunks are traded as NFTs, which means that their value grows through public perception, much like regular art trading. Each CryptoPunk has a unique aesthetic, which adds to the collective value of the digital asset.
Larva Labs' overall transaction volume is at least $200 million, according to CryptoSlam. CryptoPunks range in price from $30,000–$10 million in ETH.
For some, CryptoPunks are a diversification tactic—for others, it's just a game.
Some people view a CryptoPunks position as a way to spice up their cryptocurrency portfolio and contribute to diversification. Others view it as a gambling technique, much like poker.
In March, notorious YouTuber Logan Paul revealed that he purchased $170,000 of CryptoPunks. Granted, Paul has also been accused of conducting a pump-and-dump scheme for the altcoin Dink Doink. He might not be the most sensible influencer to follow.
How to find CryptoPunks for sale
Larva Labs says about its CryptoPunks, "Originally, they could be claimed for free by anybody with an Ethereum wallet, but all 10,000 were quickly claimed. Now they must be purchased from someone via the marketplace that's also embedded in the blockchain."
Head to the CryptoPunks marketplace to find an NFT for sale. Punks with a red background are up for sale, while punks with a blue background are claimed.
How to buy CryptoPunks and get in on the speculative NFT action
If you're after a digital asset that isn't based on fundamentals but has value in an artistic and collectible sense, then you might be looking to buy a CryptoPunk of your own.
You can only buy CryptoPunks with Ether cryptocurrency, so you first need to purchase enough ETH to get the job done. As of mid-day on Aug. 6, one ETH coin is worth $2,786.25.
Once you have enough ETH, you need to get a Google Chrome plugin called MetaMask. The plugin will let you bid on, buy, and sell punks on the marketplace.
True Official Genuine CryptoPunks™ (yes, it's a thing) have a SHA256 hash on the composite image that should be the same as the hash stored in the blockchain contract.
The more valuable punks are ones with rarer features, like beanies (the least common attribute of any CryptoPunk).