JPEG Summer: Exploring the data behind the NFT boom

In the past two weeks, NFT sales have surged, far surpassing the March NFT boom. The number of transactions on OpenSea , the largest NFT market , reached a peak of over 60,000 per day last week, which is close to 8 times the peak in March. OpenSea’s transaction volume has exceeded 1 billion U.S. dollars in August, and the number of daily independent buyers has also reached a record high. 


Source: Coin Metrics Network Data Pro

Some events at the end of July seem to have sparked prosperity. On July 30, an anonymous buyer spent $7 million to acquire 104 CryptoPunks in a block. They selectively purchased 104 of the cheapest CryptoPunks on the market, greatly increasing the reserve price (“reserve price” refers to the price of the cheapest available NFT in the collection). They went on to explain that they viewed CryptoPunks as a long-term store of value and as part of their strategy for optimizing liquidity and diversification.  


Why did I buy 104 CryptoPunks with a reserve price of USD 7 million? It’s simple: because I choose wealth.

Buyers also used MiningDAO to send all 104 transactions directly to miners. This means that the transaction is not public until the transaction is added to a block, which prevents pre-runners from buying these CryptoPunks before the transaction is completed. Before the scan, the average selling price of CryptoPunk (500 sales before counting) was about 60,000 US dollars. But since the purchase, the average selling price of CryptoPunk has increased to close to $200,000. 


来源:Coin Metrics Reference Rates & OpenSea API

Since the beginning of August, the trading volume of CryptoPunks has exploded. But in addition to it, there are a large number of animal-based NFT projects that have taken over Twitter profile pictures.  


来源:Coin Metrics Reference Rates & OpenSea API

The transaction volume of Bored Ape Yacht Club (BAYC) soared after it was announced that it would be exhibited at Christie’s auction. Since then, BAYC’s transaction volume has reached one million U.S. dollars, and the reserve price has reached more than 15 ETH. In addition to BAYC, other profile picture collections also made it to the OpenSea rankings. After the Twitter battle with BAYC, Pudgy Penguins’ transaction volume soared, reaching $13.5 million on August 13.

At about the same time as the CryptoPunks sweeping purchases, Singapore’s hedge fund Three Arrows Capital began to buy NFTs frantically. In the past two weeks, the company has spent thousands of ETH to purchase NFTs, mainly in Art Blocks and CryptoPunks. 

Art Blocks is a generative art platform that produces popular collections including Ringers, Chromie Squiggles and Fidenzas. After Three Arrows Capital began to invest, the Art Blocks market experienced explosive growth. 


来源:Coin Metrics Reference Rates & OpenSea API

On August 9, the two NFTs in the Ringers series were sold for 400 ETH and 370 ETH, which are the two highest prices of the series so far. On August 14, Chromie Squiggle was sold for 750 ETH, which is approximately US$2.4 million. 

The price of Art Blocks has soared in the past two weeks. There are dozens of Art Blocks projects with different prices, but the average selling price is as high as US$29,500, reaching its peak on August 10. 

The crypto art market has made a comeback again after its peak in March. The daily trading volume of SuperRare , the leading peer-to-peer encrypted art market , is picking up after hitting a record high in March. On August 3rd, Summer.jpg of XCOPY, one of the earliest artists on SuperRare, was sold for 336 ETH, which is approximately US$838,000.

During the peak month of the NFT in March, crypto art received a lot of media attention. Among them, Beeple’s work was sold for $69 million on March 11. But this summer, mainstream media attention did not reach a similar level, at least so far. In hindsight, the $69 million Beeple work marked the peak of prosperity in March. 

But apart from Beeple, the price of ETH began to rise in mid-March and hit a record high of $4,100 in April. As the price of ETH exceeded $4,000, NFT sales fell. After ETH plummeted, NFT sales began to take off again.


Source: Coin Metrics Network data and Reference Rates

This may show the relationship between the NFT market and the price of ETH. NFTs are usually priced in ETH, so if the price of ETH suddenly rises, new entrants may be excluded. For example, an NFT priced at 2 ETH may suddenly rise from a cost of approximately $3,000 to more than $6,000. For some potential buyers who do not already own ETH and need to use fiat currency to buy the cryptocurrency market, these types of price increases may make it too expensive. 

But there may also be some reflexivity between the NFT market and the price of ETH. People buy ETH to buy NFTs, then sell their NFTs with more ETH, and then often reinvest these ETHs into more NFTs. High NFT sales have brought new attention to ETH and helped bring more users into the Ethereum ecosystem. 

During the March NFT boom, NFT sales and ETH prices rose simultaneously until the market suddenly slowed down due to oversupply. Both NFT sales and ETH prices are now rising again. 

Although NFT sales have soared this summer, global Google searches for “NFT” are still far below the peak in March. If NFT starts to receive the attention of the outside world as it did earlier this year, there may be greater prosperity in the future.

xH4K2GsRNlf7pEFYEs2miWs7t2vXam9UZbbsATec.pngSource: Google search trends and Coin Metric network data

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