When Visa decided to purchase a CryptoPunk NFT last week for $150,000 they bought one of the nicer CryptoPunks at a time when some others were selling for only $100,000. Today, the cheapest CryptoPunk is selling for $400,000. One CryptoPunk that just sold a few minutes ago for 135 Ethereum or $438,000, previously sold four months ago for 33.5 Ethereum or $72,000. Visa itself not only made a good investment, but a brilliant marketing move.
Total CryptoPunk sales on the blockchain over the last 24 hours have reached a record $128.8 million. All over social media, CryptoPunk owners are quitting their jobs to become full time investors in what they believe are 1 of 1 JPEGs, but are actually just lines of code pointing to a JPEG and if a centralized server goes down and that URL goes dead the NFT itself points to nothing and becomes worthless.
CryptoPunks are not "art work" that would have legitimate value in the "traditional art market" and therefore deserve similar value in the digital market. All CryptoPunks are generated using a computer algorithm and are the same except for alterations in their skin color (clearly racist), gender (certainly sexist), eyes, hair, beard, makeup, jewelry, and eyewear. These alterations are made automatically when a CryptoPunk gets minted. There is no real time/energy invested by an artist into creating a CryptoPunk, yet somehow the cheapest CryptoPunk is now worth more than the cheapest Pablo Picasso painting.
With all 10,000 "1 of 1" CryptoPunks now worth a total of more than $4 billion, NFT investors are searching for the next CryptoPunk and have been loading up on CryptoPunk copycats like Bored Ape Yacht Club, 0N1 Force, and World of Women. Bored Ape Yacht Club also has a total of 10,000 "1 of 1" NFTs with the cheapest one now selling for $167,000. One Ape that just sold a few minutes ago for 60 Ethereum or $194,700 previously sold four months ago for 0.14 Ethereum or $413. A few lines of code pointing to the URL containing the computer generated JPEG of an Ape has seen its price appreciate in value by 47,000% in four months!
If this isn't a warning sign that hyperinflation is imminent we can't imagine any other warning sign that would be more alarming than this!
The Fed must stop printing money and start raising the Fed Funds Rate immediately but Powell is more concerned about keeping his job!