It’s been a turbulent few days for the darlings of the NFT world, cryptopunks. The initial forecast was optimistic, as the quintessential top-tier NFTs saw an incredible increase in floor price and market cap. However, soon after, the NFT space was rocked by an unprecedented event: a massive dump by CryptoPunks.
On March 21, over $17 million in CryptoPunks was dumped in a 15-minute period, generating a staggering 10,000 ETH trading volume. This unexpected move sent shockwaves through Blur’s bidding system and caused the minimum price to drop from a high of 75 ETH to 65 ETH.
curse.
Machi got hit with 77 Punks in that massive dump
Unrealized P/L of -1456 Ξ 😳 pic.twitter.com/Kh0gI8QayB
— BagHoldingNFTs (@BagHoldingNFTs) March 20, 2023
Despite the significant move, CryptoPunks has maintained its position above its fellow high-flyer BAYC in terms of market capitalization. Mainly because the algorithmically generated apes saw their own downturn as the market contracted following the collapse of Silicon Valley Bank.
caught in the crossfire
The massive dump was driven in part by Blur’s ongoing farming frenzy, as collectors clamor to benefit from their “loyalty” program. Blur’s farming mechanic involves the daily 24 hour volume of a collection correlating to the number of points it will produce. Consequently, farmers aim to bid for the best collections with the lowest possible royalties to minimize losses.
CryptoPunks were recently added to Blur with 0% royalties instead of the typical 0.5%, making them the most attractive collection to farm for bid points. The lack of royalties fostered intense competition among farmers, pushing the floor price of CryptoPunks up to the dizzying heights of 75 ETH. However, the rapid growth could not be sustained as the 75 ETH wall proved to be a formidable barrier.
This incredible series of events saw the NFT whale, Machi Big Brother caught in the crossfire, with reports stating that he picked up as many as 77 Punks through Blur’s automated trading feature. Prior to the dump, Machi had successfully bid thousands of ETH across major collections, earning roughly 4% of total bid points. However, the smooth sailing came to an abrupt halt when the market began to turn worse.
As the NFT market continues to evolve, the implications of the massive CryptoPunks dump on the broader market remain uncertain. This event is a cautionary tale for investors and enthusiasts, highlighting the inherent risks and volatility in the rapidly evolving NFT space. It remains to be seen how the market will react to this unprecedented event and whether it will lead to more sell-offs or trigger a price rally.
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*All investment/financial opinions expressed by NFT Plazas come from the personal research and experience of our site moderators and are intended for educational purposes only. People are required to fully research any product before making any type of investment.
NFT and Web3 Ambassador. Bullish on everything related to Blockchain.
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