NFT Trading

First Seen: January 2021 · Boom: Feb-Nov 2021 · Status: Peaked Nov 2021, declined 2022-2023

Overview

NFTs (Non-Fungible Tokens) are unique digital assets verified on blockchain, representing ownership of art, collectibles, or media. Unlike fungible crypto (1 BTC = 1 BTC), each NFT is unique.

Built on: Ethereum (primarily), Solana, Polygon

Early NFT History

CryptoPunks (2017): 10,000 pixel art punks, free mint
CryptoKitties (2017): Collectible cats, clogged Ethereum network
2018-2020: Quiet period (few buyers)

2021 NFT Boom

Catalysts:

• Beeple’s “Everydays” sold for $69M at Christie’s (March 11, 2021)
• NBA Top Shot (basketball highlights) viral success
• Bored Ape Yacht Club (BAYC) launch (April 2021)

Peak mania: Aug-Nov 2021

• OpenSea $3.4B monthly volume (Aug 2021)
• CryptoPunks floor price: 100+ ETH ($400K+)
• BAYC floor: 50-150 ETH ($200K-$600K)
• Celebrity adoption (Snoop Dogg, Jimmy Fallon, Paris Hilton, Steph Curry)

Bored Ape Yacht Club (BAYC)

Launch: April 30, 2021 (10,000 apes, 0.08 ETH mint $200)
Peak: 150 ETH floor ($600K, March 2022)
Cultural phenomenon: Celebrity profile pictures, yacht parties, Yuga Labs IP rights

Expansion: Mutant Ape Yacht Club, Otherside metaverse land, ApeCoin token

Collapse (2022-2023)

Bear market:

• OpenSea volume: $3.4B (Aug 2021) → $500M (June 2022) → $100M (2023)
• BAYC floor: 150 ETH → 30 ETH (-80%)
• CryptoPunks: 100 ETH → 40 ETH

Reasons:

• Crypto winter (ETH down 70%+)
• Regulatory scrutiny (SEC vs NFT projects)
• Scams, rug pulls eroded trust
• Market saturation (too many copycat projects)

Criticism

Right-click save: Anyone can copy JPEG (NFT defenders: “ownership != possession”)
Money laundering: Wash trading, price manipulation
Environmental: Proof-of-work energy consumption (pre-Merge)
Speculation: Most buyers motivated by flipping, not art appreciation
Celebrity pump & dumps: Influencers promoted projects, then dumped

Legacy

Digital ownership: Proved blockchain provenance viable
Creator royalties: 5-10% royalty on secondary sales (revolutionized artist economics)
Community building: Profile picture (PFP) projects created online tribes
Failed promise: “Utility” NFTs (access, gaming) mostly failed to deliver

Sources

• OpenSea marketplace data
• r/NFT subreddit
• CryptoPunks/BAYC sales history