CryptoPunks Price Guide: Why Is This Collection Worth $2 Billion?

CryptoPunks is the most valuable NFT (non-fungible token) collection in the world, with a $2 billion market cap. And as of writing this, the CryptoPunks floor price (lowest price) is chilling at a cool 66.95 ETH ($81.59k) according to NFTGo.

But what’s backing up the CryptoPunks price? Contrary to popular belief, CryptoPunks was not the first NFT collection on the Ethereum blockchain. And unlike Bored Ape Yacht Club, CryptoPunks NFTs do not offer its holders an ever-expanding list of exclusive perks.

Are CryptoPunks and all other projects in the NFT market just hype, like Bill Gates would have you believe? Or is there more than meets the eye to these pixelated portraits?

A sneak peak of the takeaways:

• CryptoPunks are prized for entirely different reasons than NFT collections like Bored Apes.
• CryptoPunks pioneered several NFT practices still in use today.
• CryptoPunks holders love the fact that the collection can’t be changed, even by its creators. 

CryptoPunks is an NFT collection consisting of 10,000 algorithmically generated characters, where no two are exactly alike and some traits are rarer than others. Character types range from humans and apes to zombies and aliens, with their appearances partly influenced by the punk rock and cyberpunk movements.

A brief history of CryptoPunks

The CryptoPunks project was minted in June 2017 by Larva Labs, a software development duo made up of Matt Hall and John Watkinson. 

As the legend goes, users could initially claim punks for free (excluding gas fees) with an Ethereum wallet. Nowadays though, you can snag a punk on OpenSea, one of the largest NFT exchanges on the planet. That is, if you’re prepared to shell out some serious money for a piece of digital art history.

Since NFTs penetrated mainstream culture in 2020, the CryptoPunks collection has become a bonafide cultural phenomenon featured in magazines, art auctions and on celebrity Twitter accounts. CryptoPunks are considered such a staple of internet culture that Yuga Labs (the creators of Bored Ape Yacht Club) recently acquired its IP for an undisclosed sum. 

But tell me anon, what makes CryptoPunks so highly regarded?

Early NFTs on Ethereum

The most common justification for paying 6, 7 and even 8 figures for a CryptoPunk is because it’s the oldest NFT project on Ethereum. But as you can see from the timeline of early Ethereum NFTs below, that honor actually belongs to Terra Nullius.

Etheria, a project that allowed users to own tiles on a map, came soon after and was the first Ethereum NFT you could transfer between wallets. Later on we got the first proper artwork project, Curio Cards, featuring multiple sets of 30 unique cards from seven different artists. 

Another game-changing project, CryptoKitties, succeeded CryptoPunks by a mere 5 months and was the first NFT game where users could breed digital cats and flip them for a profit. CryptoKitties is also largely credited with popularizing NFTs, ultimately going so viral that it congested the Ethereum network and drove gas prices to all-time highs. 

And while a few CryptoKitties did end up switching hands for hundreds of thousands of dollars during peak mania, these collectibles ended up being poor stores of value because users could breed infinite cats (although with varying levels of rarity). As I write this, the floor price of CryptoKitties on OpenSea is sitting at a meager 0.001 ETH ($1.23).

Okay so why did the CryptoPunks collection end up becoming more valuable than all these other early NFTs, which at one point or another were even more popular?

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Legacy

While CryptoPunks were not the first NFTs on Ethereum, they were in fact one of the earliest and the first Profile Picture project (PFP)—with PFPs currently being the most popular category in the NFT space. CryptoPunks was also the first NFT project to implement the now common 10,000 token supply cap. 

Here’s another fun fact for ya. The OG CryptoPunks were actually built as custom ERC-20 tokens that don’t comply with any standards. Following their creation, CryptoPunks inspired the development of the ERC 721 token standard that all modern NFT projects use. 

We’ve got the historical significance down. Now onto rarity.

Rarity

Another thing CryptoPunks has going for it is its immutability. Larva Labs locked the project inside of a smart contract and ceded all control over the creation and trading of punks. Since no one can make any changes to the CryptoPunks contract, the project’s value cannot be diluted by increasing its supply. This is a huge selling point for CryptoPunks as a store of value. 

Now why are some punks worth thousands of dollars and others millions? While some investors take subjective aesthetics into account, most obsess over the rarity of attributes. 

Of the 10,000 total punks, there are 9,879 humans, 88 Zombies, 24 Apes and 9 Aliens. As of June 2022, all three of the top-selling punks are Aliens, with punk #5822 fetching $23.7M back in February. 

Aside from character type, there are 87 potential  attributes, with Beanie being the rarest possessed by only 44 punks. Finally, investors also pay attention to attribute count.  As an example of attribute rarity, CryptoPunk #8348 (also called “7-atty”) is the only one with 7 attributes and was last sold for 85 ETH ($18,102) on May 20, 2020. 

Rarity, however, isn’t a foolproof predictor of NFT value, with the desirability of certain attributes swinging wildly based on market sentiment. For example, the Hoodie attribute (cheapest: 300 ETH) is currently more coveted than the Choker attribute (cheapest: 135 ETH) despite being 5x less rare. 

Community

Unlike other projects, CryptoPunks doesn’t rely on promises of exclusive perks like intellectual property rights, IRL meetups and metaverse integrations to draw in new buyers. So what concrete utility does CryptoPunks give its owners? Well, not much outside of a chat function.

CryptoPunk has a public Discord group with one private channel called “the-lab” where only punk owners can send messages. Still, this channel is readable by all so even non-punk owners can glean some NFT insights from these early adopters and whales by being a fly on the wall.

Status

As CryptoPunks morphed into a billion-dollar media property, CryptoPunks have become a status symbol and using one as your social media avatar has become a digital flex. Twitter users with CryptoPunk avatars, for instance, are often viewed as smart money investors and quickly amass large followings as a result.

Provenance

When it comes to art valuation, the notability of previous owners plays a significant part. And in that regard, CryptoPunks has attracted the attention of rich and famous buyers like rapper Jay-Z (Punk #6095), entrepreneur Gary Vee (Punk #2140), tennis player Serena Williams (Punk #2950) and YouTuber Logan Paul (Punk #2294). 

Today, the 10,000 punks in existence are scattered across some 3.5k wallets according to Etherscan. The single largest collection, at 422 punks, is held in a wallet belonging to Yuga Labs while the individual user with the most punks (266) is Wilcox.eth.

Affinity

One of the least quantifiable factors related to CryptoPunks’ value is that passionate punk owners have turned down multi-million dollar offers due to forming emotional bonds with these characters. Daniel Maegaard, whose sizable CryptoPunk collection includes the 7-atty mentioned above, has confessed to regretting every sale he made. This HODL mentality naturally drives up floor prices.

Properly valuing CryptoPunks is nearly impossible, considering that most of its value is based on qualities like legacy and social status. Not to mention that CryptoPunks doesn’t have any comparable projects because it is by far the largest NFT collection. 

But this is simultaneously a strength, as CryptoPunks is the most liquid NFT collection on the market with 1,100+ listings. Investors feel more comfortable buying into a project they can easily exit. 

Drew Austin, Founder of Red Beard Ventures & Knights of Degen, on what makes CryptoPunks so valuable:

To buy a CryptoPunks NFT, you'll first need to get some Ethereum (ETH). Coinbase makes it easy to purchase ETH, and the platform also supports the buying and selling of NFTs. If there are no available CryptoPunks on the Coinbase NFT marketplace, go the the Larva Labs marketplace. From there, you can bid on any available CryptoPunks, which are demarcated with a red background (available for sale) or a purple background (currently being bid on).