One glance at the crypto market and you might think that NFTs were dead. Volume on OpenSea — the largest NFT marketplace — is the lowest in 12 months and many once-popular projects like Doodles, Moonbirds and Nike’s CloneX have fallen in value by over 80% in dollar terms. Even Bored Ape Yacht Club (BAYC) — the biggest NFT project in the space — is down more than 70% in U.S. dollars.
While the crypto winter has cooled the market, according to collectors, musicians and executives in the space, it’s also iced out overhyped projects and brought unrealistic expectations back to reality. Meanwhile, projects that collectors in the space consider high art and culturally significant are getting more shine.
Snoop Dogg, The Weeknd, Steve Aoki and Diplo have all been active NFT buyers in the bear market but what are they spending their ETH on? Who else is still buying NFTs? And how has the market changed since the crypto crash?
Over the last two months, the NFT market has seen a return to high-end 1/1 artwork — unique, one-of-a-kind digital art that often sells for extremely high price points. Sales volume on the leading artwork platform SuperRare hit $7.6 million in August, the highest in five months. So who’s buying? “Crypto-natives, overwhelmingly,” says a prominent art collector known as BΞN. “To be clear, net volumes are still down a lot [but] successful artists are getting a strong bid in many cases, and in some cases hitting all-time highs.”
In late July, a 1/1 by leading artist XCOPY sold for 256 ETH ($443,000) — one of the artist’s largest ever sales in ETH terms. Collectors of these 1/1s are playing a long-game, BΞN says. They are patient individuals, relatively flush with crypto, taking advantage of the lower price of ETH to purchase artwork they intend to hold for years.
Snoop Dogg’s art-collector alter ego, Cozomo de’ Medici, is one of these buyers. He purchased several 1/1s on SuperRare in the last two months including a piece by rivenribbon for 42 ETH ($71,655) before announcing a break from NFTs.
The Weeknd also scooped up a 1/1 by renowned NFT artist Fvckrender for 25 ETH ($44,287) in August. That same wallet purchased nearly 50 additional NFTs from other Fvckrender projects, as well. Although the wallet isn’t verified yet, The Weeknd did retweet a confirmation of the SuperRare purchase.
A number of “generative crypto art” projects — where the artist uses an algorithm to create and mint their work to a blockchain in real time — have also been out-pacing the market. The Fidenza and Ringers projects from leading generative art platform Art Blocks have both grown in value, with floor prices increasing from 42 ETH in April to a high of 92 ETH in August and from 32 ETH in May to as high as 80 ETH, respectively. That’s more than covered the 50% drop in Ethereum value over that timeframe. Converted to dollars, the Fidenza floor price increased from $126,000 to $145,000 and Ringers’ increased from $86,400 to as high as $128,000 from May to August.
Snoop Dogg was a big buyer of ArtBlocks in July, through the Cozomo de’ Medici alias. Cozomo purchased a piece from the Ringers collection for 99.69 ETH ($171,500).
Legacy generative art NFT project CryptoPunks remained strong during the broader selloff, too. These 10,000 pixelated punk characters were the first of their kind ever minted to the Ethereum blockchain. For that reason, they are considered culturally important and enormously valuable. While the rest of the market crashed, the floor price of a CryptoPunk almost doubled between May and August, from 45 ETH to a high of 83 ETH before settling in September at 66 ETH. Throughout the volatility, the dollar price remained fairly steady, between $106,000 and $120,000. Steve Aoki bought two CryptoPunks in July and, of course, Cozomo de’ Medici was waiting at the bottom of the crypto selloff to capture a CryptoPunk for 50 ETH.
“I’d expect things like Punks to be a bit less sensitive to market downturns,” BΞN says. That’s partly because of their cultural significance and long-term, crypto-native collector base, but also because holders may feel attached to the NFT on an aesthetic and identity level.”
Leading artists are spending their ETH on supporting other musicians, too. Diplo bought an NFT from emerging star Daniel Allan’s latest collection, which was one of the best-selling music NFTs in July. Allan is one of Web3’s breakout artists, having built his early career on the back of NFTs.