Art Blocks NFTs had a massive surge this week. The platform for generative art saw several collections register sales of over $100,000. What caused this sudden surge in price action for Art Blocks?
Why is Art Blocks Mooning?
The sales frenzy kicked off with a surprisingly high price paid for Fidenza #725 at Sotheby’s on May 19. The piece sold at auction for $1,016,000, almost five times higher than estimates. This sale sent a clear signal to NFT collectors everywhere that there is still demand for blue-chip NFTs even in a bear market.
Following the Sotheby’s sale, money poured into several Art Blocks collections. Chromie Squiggles soared 27% and Friendship Bracelets pumped 40%. Sail-o-bots by Che-Yu-Wu led the way with an amazing 99% floor increase, nearly doubling the floor from 1.25 ETH to 2.49 ETH.
The volume continued into yesterday with another Fidenza sale for 370 ETH. To add to the action, a Ringers piece sold for 52.5 ETH and a Gazers sold for 14.95 ETH. Chatter on NFT Twitter seemed positive for a change as large accounts remarked that it “felt like 2021 again”.
Is it Still a Good Time to Buy Art Blocks NFTs?
It’s hard to say whether or not this is a good moment to buy Art Blocks NFTs. They definitely seem to have carved out a niche as historically significant pieces of art. Many well-regarded NFT collectors base their portfolios around Art Blocks, believing that they will stand the test of time better than most digital collectibles.
This recent price swing highlights how low liquidity and small collection sizes can create wild pumps and dumps. At any given time, there may only be a couple dozen NFTs in any given Art Blocks collection listed for sale. Therefore, when one or two items sell, the floor can easily double overnight.
Conversely, there are relatively few buyers capable of purchasing high-priced items like Fidenzas. So when liquidity dries up, floors of these projects get hit heavy. Because of this, Art Blocks projects are better for long term holds betting on the future of digital art versus something just to flip.
Either way, this week’s price action has been a much needed change of pace for NFT collectors.
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