Sotheby’s “Rugged” After 104 CryptoPunk NFTs’ Sale Cancels

Key Insights

• The collection, which is worth about $30 million, was announced on February 8
• The owner of the CryptoPunks decided to cancel the sale and HODL his NFTs for reasons undisclosed
• Investors are now treating NFTs as a hedge against Bitcoin and the crypto market as they did with Bitcoin against inflation

Known for the auctions of priceless and extravagant items of artwork and more, Sotheby’s had recently announced that they would soon be setting the stage for a $30 million auction. However, before the sale could begin, the CryptoPunks’ owner called it quits.

Sotheby’s Just Got Punked!

The owner who goes by the username ‘0x650d’ announced on Twitter that he decided to HODL instead of selling his CryptoPunks.

The collection, which was named Punk It! Comprised of 104 CryptoPunks approximated to be valued at around $30 million, and was supposed to go on sale on February 23.

For the same auction, Sotheby’s went all out as this would’ve been one of the biggest auctions ever, as well as the largest NFTs auction in history. The auction house set up an exhibition for all 104 NFTs in the Metaverse of Decentraland a day before the sale was scheduled to go live.

Although the owner did cancel the sale, the reason remained unknown. Some estimated this to be a prank on Sotheby’s, and it did seem legitimate given the owner poked fun at the auction house with this meme.

pic.twitter.com/M0l9wvH3T5

— 0x650d (@0x650d) February 24, 2022

A rug pull is usually a kind of scam when developers of a project lure in investors with exceptional promises and then abandon the project to steal the investors’ money.

Although it isn’t the same case here since no money was involved, the CryptoPunk owner did lure in Sotheby’s with the promise of auctioning his NFTs but backed out at the last second.

The announcement did come as a surprise since earlier at the time of the auction’s announcement, the NFT owner stated that this was a huge opportunity to showcase CryptoPunks on the same level as traditional art. He tweeted:

“I simply could not pass up the opportunity to elevate CryptoPunks in the international art community. And with this sale, the CryptoPunk collection will be solidified in the broader art world.”

Another possible reason could be the ongoing global political situation that has affected stock markets and the crypto market worldwide.

NFTs, Bitcoin, and the Stock Market

Surprisingly, at the moment, as Bitcoin’s correlation to the stock market is increasing, NFTs correlation with Bitcoin seems to be heading in the opposite direction. 

Looking at the statistics, one can observe the growth of NFTs has been inversely proportionate to the growth of Bitcoin and the crypto market. 

Between July 2021 to November 2021, as the overall crypto market rose by 141.88% ($1.7 trillion), NFT sales dropped by 38.2% ($1.3 billion).

However, when the crypto market began crashing and fell by $1.3 trillion till January, NFT sales shot up by 138% to almost $5 billion.

Now, as the market began showing signs of recovery towards January end and early February, NFT sales fell again.

This is proof that NFTs have become investors hedge against Bitcoin and the crypto market’s risks.

As Bitcoin aligns itself further with the stock markets, people will begin looking into other investment options. And given the NFT bubble is at its peak, they seem to be preferring it right now.