The NFT world has seen a major disruption in the past few days, as CryptoPunks – the quintessential blue-chip NFTs – experienced a major dump worth over $17 million within a 15-minute timeframe.
The unexpected move created a trading volume of 10,000 ETH and sent shockwaves through the NFT space, causing the CryptoPunks’ floor price to drop from a peak of 75 ETH down to 65 ETH.
The dump was largely driven by the contested Blur farming frenzy, as collectors aimed to benefit from the platform’s loyalty program via points earned from bidding on top collections with the lowest possible royalties.
CryptoPunks recently became the most attractive collection for farming bid points as the platform added the NFTs with 0% royalties instead of the typical 0.5%, sparking intense competition among farmers and driving the floor price up to 75 ETH.
However, the rapid growth proved unsustainable as the 75 ETH wall proved a significant barrier. The massive dump has cast uncertainty on the broader NFT market, and it remains to be seen how the market will react to this unprecedented event and whether it will trigger further sell-offs or instigate a price rebound.
The NFT whale, Machi Big Brother, was caught in the crossfire, having reportedly bought 77 Punks through Blur’s automated trading feature before the dump. The event serves as a cautionary tale for investors and enthusiasts, highlighting the inherent risks and volatility in the rapidly evolving NFT space.
Despite the significant movement, CryptoPunks’ market cap remains above fellow high-flyers, Bored Ape Yacht Club (BAYC), which has seen a downturn of its own as the market contracts following the collapse of Silicon Valley Bank.
As the NFT market continues to develop, the impact of the massive CryptoPunks dump on the broader market remains unclear.
It’s essential for investors to conduct thorough research on any NFT product before making any investment decisions.