The projects are trying to replicated Beeple’s success of creating value through scarcity. DraftKings Inc. announced its own NFT marketplace with a slew of sports collectibles, including digital cards signed by football great Tom Brady. Alibaba Group Holdings Ltd. launched a marketplace. Actors Mila Kunis and Ashton Kutcher and Ethereum co-founder Vitalik Buterin have teamed up on Stoner Cats NFTs.
Savvy crypto investors such as Benjamin Tan have taken notice. Over the past few weeks, the 35-year-old entrepreneur has gone on a shopping spree to collect Pudgy Penguins NFTs, saying their cute cheeks and bright eyes are reminiscent of his seven-month-old daughter.
The average price for each collectible in the series has skyrocketed more than a hundred times just this month to the equivalent of about $12,000, NFT Stats show. Tan said he recently sold his highest-valued penguin—one in a pineapple suit on a beach—for 130 Ether, or roughly $410,000, a 160% jump over his nine days of ownership.
“In the past, people probably flexed using a Rolex or expensive car,” said Tan, who lives in Singapore. “The new ‘it’ way to flex now is a very exclusive profile picture.”
Mainstream corporations are getting interested too. On Aug. 23, Visa said it bought CryptoPunk #7610 for about $150,000. Terry Angelos, Visa’s head of fintech, said the goal was to learn about handling NFT transactions even though the payments company doesn’t provide NFT-related services.
Some of the activity may also be driven by questionable practices. Some sellers are driving up prices via recycling.
Carlos Domingo, chief executive officer of digital-asset securities firm Securitize in Miami, said the technology is valuable, the market is interesting and it has huge potential. But, as is the case with every unregulated market, scams can happen.
He recalls seeing a tweet of someone boasting that they had created an NFT and sold it back and forth to themselves until the price had run up by four. “In any market, that would be totally illegal,” Domingo said.
Fake NFTs—whereby someone copies an artist’s digital work, places it on the blockchain and sells it in the artist’s name as an NFT—have become “a significant” problem on OpenSea, Finzer said. Artist Derek Laufman said he woke one morning in March to find emails and tweets asking him if his NFTs for sale on a couple of sites were legit—they were not.
“It sort of seemed silly to me that this thing that’s supposed to be secure is being represented with my name on it,” Laufman said. “And a couple of people did buy it.” OpenSea is implementing new tools to catch fake NFTs, the company said.
Borsai, for his part, said the market’s being recognized in a big way and the infrastructure getting built up makes it more sustainable. He recently bought an NFT whereby an artist will build him a model rocket—one that shoots off toward the moon. Just like advocates of Bitcoin have long promised.
This article was provided by Bloomberg News.