Welcome to NFT Insider for December 23, 2021, brought to you weekly by Alts.
Tons to cover this week, but before we kick off, just a reminder that our Discord is live and it’s free for all our members. Join the conversation and share insight and opinions with other NFT aficionados.
NFTs in 2021
The base size here is pretty small, but we did see a slight bump last week in the trading performance of fractional NFTs. And zooming out for the year, the picture is very positive – NFTs are up over 200%, with most assets holding steady the past two weeks.
Looking at the value of the NFT market more broadly, total daily sales bottomed at about $22 million per day one week ago. But similar to what we’re seeing in the fractional space, the last three days have seen a rise in total sales volume, with each day seeing over $30 million in daily sales.
NFTs Last Week
NFTs on Fractional Marketplaces
Three different NFTs were IPO’d on the Rally and Otis platforms last week, and all three are still open for funding. Rally’s “Laser Eyes” Bored Ape #4612 is just 38% funded with $266k out of the $700k goal funded. Worth noting it’s now listed as a 12/31/21 IPO.
With all three IPO’s still unfunded, it appears that the NFT market is still cooling from its fever pitch from three months ago. Otis had to delay David Hirst’s piece from “The Currency Collection” because of a steep drop in valuation from when it was acquired (more on that later).
On the secondary markets, NFT Avatars saw a huge jump thanks to a run up on Rally for CryptoPunk #9670. That Punk has consistently been trading above $40 per share, which is why we see the category performing so strongly. By contrast, CryptoPunk #2142 is trading for $0.73 per share with a massive sell-off this week that saw the price plummet to as low as $0.68 per share.
NFT Art took a hit, but this isn’t a big surprise given a) the movement is based on only two trades, and b) both assets sold on Otis, which we know has been struggling lately with liquidity issues.
Despite this, we’re seeing assets trading above inferred values (check out ChromieSquiggle #524, which we think has an inferred value of $33k, vs. a market cap of $26.6k). So if you picked up shares at the IPO, you might want to consider taking some money off the table.
NFTs on Opensea
As reported last week, Nike acquired RTFKT’s Clone X project, and this week we see that taking the top spot on OpenSea as prices shot through the roof last week, indicating investors think there’s even more room to grow here.
While the exact details of the sale weren’t disclosed, our research indicates that the RTFKT (pronounced “artefact”) acquisition was for between $250 – $500 million.
In the third spot is the RTFKT – CloneX Mintvials. As explained in last week’s issue, these are CloneX figures that are awaiting their big reveal. At time of writing, the vials are still at a whopping 11.95 ETH, offering investors the potential to snag a rare CloneX figure that could treble in value.
NFTs at Auction
Otis finished its first NFT Auction as part of its new venture, Otis House, which blends physical and digital ownership. Otis handles the vaulting of physical items and issues an NFT that represents ownership of the article to its owner(s).
One of the critical features of the auction is that groups of people or DAOs can band together for a winning bid. Otis currently supports PartyBid, which you can read about here.
Here are some of the highlights from last week’s auctions with realized prices:
- Nintendo Super Mario Bros. 3 WATA 9.6 ($18.8k at time of writing)
- 2003 Topps Chrome LeBron James #111 PSA 10 ($10.3k at time of writing)
- Bob Ross Oil on Velvet (1971) – Signed ($10.2k at time of writing)
A one-of-a-kind NFT with a never-before-heard demo recording of Whitney Houston at age 17 sold for just one dollar shy of $1 million last week. The music NFT platform, OneOf, held the auction.
The result is reminiscent of when PleasrDAO purchased Wu Tang’s “Once Upon A Time in Shaolin” for $4 million in October. It also speaks to the values that rare recordings from historically significant artists can realize.
NFTs This week
No IPOs this week. As mentioned above, all three IPO’s from the previous week are still unfunded. For some background on the offerings, make sure to read last week’s NFT Insider here.
Interesting projects elsewhere
Floor Price: 3.8ETH ($15k)
Hirst created 10,000 pieces of different colored dots on A4-sized, hand-made paper. About a month ago, these NFTs averaged $20k per sale. One month later and the market value has dropped by 30%. These pieces could continue dropping, so it’s worth keeping an eye on.
Of course, $14,000 is still a significant amount of money for most people. But if you’re looking to invest with a group of people, this is an asset worth exploring. In case you haven’t heard about this, Hirst has given owners the option to destroy their NFT in exchange for the physical artwork, done by hand (some by him, some by other artists in his studio) and signed by him. All 10,000 pieces are securely stored in a vault somewhere, and the catch is that whichever one you don’t choose gets burned.
So theoretically, there will always be 10,000 of these pieces in existence. But because some people will burn their NFTs (choosing in favour of the physical artwork), while others will choose to keep them, a degree of scarcity will exist within a collection that is essentially indistinguishable.
The entire project conducts an interesting social experiment with game theory at play. Will collectors value the NFT over the physical? Will enough people keep their NFTs to make the physical pieces rarer and, as a result, more valuable than the NFT versions?
Lots to learn about this project (check out all the details about Wagmi-san and his New Tokyo workshop here), but in a nutshell:
- 10KTF is a fashion-based NFT project offering personalized bags and sneakers for owners of supported “picture for proof” (PFP) projects
- The projects currently supported are: 0N1 Force, Bored Ape Kennel Club, Bored Ape Yacht Club, Cool Cats, Cryptoadz, Gutter Cat Gang, Mutant Ape Yacht Club, Pudgy Penguin, Wolf Game, and World of Women
- You can buy already-minted items with the above PFP projects, or you can buy a blank canvas and print your PFP, given that it is one of the supported projects
- With Nike’s recent acquisition of RTFKT Studios and Adidas’ acquisition of Bored Ape #8774, other fashion brands might be looking to jump into the space with established NFT projects
Bitwise launched an NFT Index Fund last Thursday for accredited investors. The minimum investment is $25,000.
Whilst it’s not the first NFT fund in existence (we took a deep dive into NFT Funds a few weeks ago, you can read about it here), what’s most notable about it is what’s not there.
Lets start with what’s in it. As you’d expect, there are multiple blue-chip assets in the fund, including the CryptoPunks and the Bored Apes. Also included are notable projects Cyberkongz Genesis, Cool Cats, Fidenza, Chromie Squiggles, and Meebits.
However, the fund lacks 1/1 art NFTs or artworks with limited editions.
That’s kind of understandable; owning any 1/1 art piece holds risk because of evolving preferences. There are also potential scandals that can bring down an artist’s career, sending valuations tumbling.
But still, the NFT art market has provided plenty of examples of how lucrative it can be, and you’d expect the principles of portfolio diversification to still apply, even to an asset class as new as NFTs.
It’ll be interesting to see how the current lineup of NFTs holds up as the market evolves. With the fund rebalanced quarterly, there’s the potential for projects to be dropped in favor of others.
We believe that a more thoroughly diversified NFT portfolio should include more than blue-chip PFP and generative art projects. It should also contain unique works of art by established and emerging artists, meta real estate, digital wearables, and play-to-earn protocols.
To that end, Starry Night Capital, Sfermion, and the Wave Financial NFT Fund have put together portfolios spanning the NFT-verse, and while we won’t offer financial advice, we do like to offer perspective when presented with potential investment opportunities, and these seem worth checking out.