CryptoPunk, a Non-Fungible Token (NFT), sold for a stunning $532 million, setting yet another high water mark for this odd asset class.
Crypto Punk, a Non-Fungible Token (NFT), sold for a stunning $532 million, setting yet another high water mark for this odd asset class. From a traditional investor’s point of view, the NFT sale helps illustrate the wild amount of speculation affecting crypto markets as well as most other asset classes.
A Twitter bot that tracks CryptoPunk sales announced the news sending crypto Twitter abuzz and making people wonder what the heck just happened. Was this massive money laundering, or what?
While this is supposed to be celebrated, the crypto community has met the unusual transaction with doubt, speculating that there could be a kind of manipulation in the sale.
Members of the community have pointed out that the new buyer and the previous holder could be the same individual because the CryptoPunk NFT was sold back to the original address that was holding it previously. Another school of thought believes that the purchase could have been made through a flash loan. If this was the case, it means the sale of the NFT might have been reversed.
Ethereum-based DeFi exchanges, such as Compound and Uniswap, make available a ton of their liquidity which anyone can “loan” for the duration of a single transaction. Flash loans use smart contracts (bits of computer code uploaded onto a blockchain) to set out the conditions and terms of the loan.
Some have suggested that today’s transaction could be an attempt at money laundering, though it is unclear how effective this strategy would be in preventing funds from being traced.
Compare that with the most expensive legitimate CryptoPunks NFT, Covid Alien, which sold at a Sotheby’s auction in June for $11.8 million. The record for an NFT was the $69 million paid for a piece by Beeple in March.
