AI Art Outpaces the Rest of the NFT Market

Non-fungible token (NFT) marketplace volumes are at local lows, but floor prices are rising, and AI art collections are outperforming the rest of the market.

Winds of Yawanawa by digital artist Refik Anadol is up 80% from 3.9 ETH to 7 ETH over the last week, and alignDRAW, a collection representing the first text-to-image prompts by Elman Mansimov, is up 90% to 1.57 ETH from 0.83 ETH in the same time period, according to NFT marketplace aggregator Blur. The collections are two of the largest gainers of the week across the NFT market.

Top collections such as Bored Ape Yacht Club, Doodles and Pudgy Penguins have all risen over the last week, with most top collections appreciating between 5% and 10%, according to Blur.

Still, NFT trading volume is at lows not seen since before the NFT boom of 2021. In August, just $148 million worth of NFTs were traded via marketplaces, whereas in January 2022, over $100 million was regularly traded in a single day.

Despite their outperformance, there is no clear catalyst for the AI art collection demand.

Winds of Yawanawa and alignDRAW are considered to be two of the most highly regarded AI art NFT collections. Refik Anadol is one of the most popular digital artists in the traditional art space and was the first NFT artist to be permanently featured in the Museum of Modern Art (MoMA).

AlignDRAW, on the other hand, is a retroactive mint of the very first text-to-image prompts to be generated in 2015, officially endorsed by its creator, Elman Mansimov.

NFTs in a Post-Blur Farming World

CryptoPunks are also up over the last month, rallying to a floor price of 28 ETH from 20 ETH on August 6, the lowest since 2021.

The move up is supported by a large number of rare Punk sales, with a “hoodie zombie” selling for $1.3 million and a “3D glasses hoodie” selling for $700,000 in the last seven days.

One of the rarest CryptoPunks, an alien trait Punk, sold for an undisclosed amount on Aug. 21. While the cost for the NFT is unknown, the most recent alien Punk sale in April cost the buyer $12 million.

The rising prices amidst low volume lends weight to arguments that say incentives offered by NFT marketplace Blur were skewing the market. Blur and Blast airdrop farmers were incentivized to bid on NFTs, and also to undercut floor prices in order to earn the maximum amount of “points.”

While many argued that Blur delayed the inevitable price collapse of major NFTs, others debated that the mechanism scared off real buyers and resulted in collections being oversold.

Bored Ape Yacht Club, for example, is up 27% since the Blast airdrop on June 26.