The NFT market is experiencing a significant resurgence, with total sales volume of over $800 million from more than 5 million transactions last month. This boom was triggered by a memecoin announcement of the popular Pudgy Penguins NFT collection. This created a demand that spread to other blue chip projects.
The market is experiencing conspicuous sales for collections that are openly described as worthless. The famous 2017 EtherRocks NFTs, a collection of 100 rocks in different colors, most recently sold for over $1 million USD in December. Last week's top NFT sales came mainly from Cryptopunks and Pudgy Penguins. Some Azuki sales, the NFT project to create a manga series based on the holder's IP, have closed for as much as $372,866. Art NFT sales such as Autoglyphs or Fidenza by Tyler Hobbs have also seen renewed activity.
EtherRock floor: 188 ETH ($728,688)
Rock 95 Ξ188
Rock 8 Ξ219
Rock 13 Ξ220
Rock 80 Ξ245
Rock 92 Ξ395Last Sales
160 ETH ($624k) on 12-14-2024
235 ETH ($943k) on 12-07-2024
228 ETH ($833k) on 03-05-2024 pic.twitter.com/odHBTqgRXS— EtherRock (@EtherRock) December 14, 2024
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Can the NFT market make it back to previous highs?
The NFT market is back to levels last seen about 1 year ago when there was a brief resurgence in the market. CryptoSlam's NFT Index provides a broad view of market conditions and sentiment. It represents a combination of market capitalization, unique traders and volume. After the NFT market cooled off in late 2022, the market struggled to regain momentum. Many projects had made bold promises that took longer than expected to deliver and didn't have a sustainable business model to generate recurring revenue. For example, Yuga Lab's metaverse, the Otherside, has just entered it's larger beta testing phase in the summer of 2024.
While the market is showing signs of healing, prices are still far from all-time highs. Volumes are also at last year's levels of around $200 million. However, this is still only a third of the levels seen at previous highs. Blue chip NFT projects have seen increased activity, such as Yuga Lab's Bored Apes, Azuki or Doodles, but releases or mints of new projects have been very scarce. New mints are down more than 99% from previous highs.
The increased activity plays into the hands of OpenSea, who had announced "A new OpenSea" coming in December 2024. The NFT marketplace faces strong competition from Blur, which secures the lion's share of all NFT trades and has given the space a bad reputation for facilitating wash trading. Early last week, news leaked that Opensea had registered a foundation in the Cayman Islands. Speculators believe this is in preparation for an airdrop, which is a regulatory issue in the US, especially under the current SEC.
BREAKING 🚨
There's a new OpenSea Foundation registered in the Cayman Islands.
You know what this means… pic.twitter.com/1IV1diEE9b
— wale.moca 🐳 (@waleswoosh) December 13, 2024
Pudgy Penguin's PENGU as an initiator
The highly anticipated PENGU coin, the official memecoin of the Pudgy Penguin NFT project, went live on December 17, 2024. The memecoin was directly available on major exchanges such as Binance, Bybit, OKX, Bitget and others. PENGU launched with a market cap of around $3.5 billion and experienced some selling pressure in the first hours of the claim, bringing the market cap down to $2 billion. At this valuation, Pudgy Penguin holders received an estimated $60k per Pudgy NFT, for the secondary Lil' Pudgy collection it was around $7k. Not only were the Penguin NFT holders rewarded, but many other communities were rewarded as well. With certain criteria being things like long-term ETH holders, users of dApps or other blockchains. In total, 7 million wallets were eligible for the airdrop.
Famous NFT trader Franklin is bored had predicted a strong correction in the floor price relative to the airdrop amount. The new floor for claimed penguins will be around $130,000 - $60,000 = $70,000, or just 17 to 18 ETH. This is congruent with the market development, as the collection floor price crashed by about 45%. However, this is likely to be a short term development, as it has already been hinted that another, potentially larger airdrop for the Abstract Chain - also owned by the parent company Pudgy Penguin Igloo Inc. - is in the works for next year.
Future market developments
In the midst of this positive and volatile activity, another Wells Notice was issued against prominent NFT project CyberKongz. A Wells Notice is a formal notice from the SEC that it intends to bring an enforcement action following an investigation into possible securities law violations. A similar Wells Notice was issued against OpenSea in August 2024, with no further update publicly available to date.
CyberKongz has received a Wells Notice from the SEC.
We are extremely disappointed at the approach the SEC has taken towards us, but we are going to stand up and fight for a brighter future that holds more clarity for NFT projects.
We have been suffering in silence for the last… pic.twitter.com/lc6hyzUPb0
— CyberKongz (@CyberKongz) December 16, 2024
Despite this, the outlook for the NFT market in 2025 appears promising, underpinned by growing activity in blue-chip projects and the time they have had to invest in project development during the market downturn. The expected return of Donald Trump to the U.S. presidency in January is expected to further improve market sentiment and the regulatory landscape, as his crypto-friendly stance will foster a favorable regulatory environment for blockchain technologies. This combination of macroeconomic optimism and NFTs poised to regain momentum with new developments ready to be released, the inclusion of the Memecoin ecosystem through airdrops, and potential regulatory clarity is driving renewed growth and adoption.
