The value of a physical item is often conditioned by several factors,including societal inclusion, financial value, and community consensus. Moreover, it builds on the supply and demand, and what other peers deem as valuable.
When taking into consideration the value of the Mona Lisa, one could argue it is priceless because there is no reference point and no similar painting with which to compare it. Thus, it holds value because it is unique, unlike CryptoPunks’ value, which operates on a supply and demand dynamic. Yet, that factor is not the sole reason why CryptoPunks are worth millions.
CryptoPunks Kickstarted a Revolution
Created by LarvaLabs in 2017, CryptoPunks are unique, blockchain, pixelated digital artworks. Each character has unique features and, to some extent, reflects the dystopian attitude of the crypto industry. For example, the 10,000 punks collection features some rare apes, reflecting the stock traders involved in the GME craze who call themselves apes for trading blindly, a semantic adopted by young crypto traders.
The NFT mania kickstarted in 2020 and culminated in 2021 with Beeple’s artwork selling for $69 million. All the while, CryptoPunks has grown in demand, with venture capitalists and high net worth individuals identifying a new financial opportunity.
Moreover, VISA has recently purchased a CryptoPunk NFT similar to how Elon Musk bought Bitcoin to add to their balance sheet. Digital assets need to be unique to draw the attention of the digital native cohort which, according to data, is most representative of millennials and Gen Z. The 2017 Crypto Kitties hype showcased that NFTs have a place in the emerging industry but it required mass consensus to be validated and integrated as a normal occurrence.
Belonging to a Crypto Culture
Statute and value are the determinant factors as to why CryptoPunks became the staple of the crypto generation. Social media operated like a trend-setting funnel as an abundance of crypto traders and enthusiasts are represented by a CryptoPunk.
The development can be associated with what researchers identify as fandom. “Most people are fans of something,” and the cult-like following of the crypto sector shows affiliations with hyped disseminated discourses. It “shows to others that you identify with this particular type of community,” said Dr. Simone Driessen, a Media and Communication lecturer, in an email to DailyCoin.
She notes that fandom’s prevailing social media behavior has transcended the digital space as it allows people to “express or connect one’s identity through something you’re a fan of.” Thus, CryptoPunk avatars are a way for users to “communicate their interests.” Twitter user MrTpunks, whose avatar is a CryptoPunk, said the artworks are the “ultimate crypto flex” in the crypto community; they represent a form of digital social status.
Twitter user gmoney.eth emphasized in early 2021 that the digital revolution is ongoing and CryptoPunks are the ultimate “flex” for those belonging to it. Cryptocurrency consultant Allen Henna mentioned in a private Twitter message that the rarity of CryptoPunks makes them all the more important to the culture,
"Everyone can't have a punk, ape, etc. Each collectible like punks makes you part of a social club."
Henna’s views on CryptoPunks reflect on other NFTs that have created a Twitter mania such as Cool Cats or BAYC, which signal specific social queues from buyers. Thus, CryptoPunks “may or may not fit for one person,” however, there are other NFTs out there that people can associate with.
CryptoPunks represent crypto status, as each NFT attributes a level of notoriety and worth. Without the high mark-up, CryptoPunks would not be the defining NFT for the current culture. As traders are driven and attached by financial gains and a speculative financial future, CryptoPunks reflect the imposed beliefs of every single trader that looks at the digital artworks and says: “I would buy that.”
CryptoPunks are not the only NFT that social media users are replacing. Price floors are an indicator of an NFT’s worth and as hysteria enters the market the price floors will be increasingly similar to that of Gutter Cats or Pudgy Penguins. While NFTs are operative in the future market, the fast price increases are attributed to user speculation, which should be taken into account each time you consider purchasing a publicized NFTs.