A user known by the pseudonym Seedphrase has made headlines by securing the largest loan in history backed by an NFT. The transaction involved the unique CryptoPunk #834, which served as collateral for a $2.75 million loan. The loan was issued through the GONDI platform with a six-month term and a 20% interest rate.
The Financial Potential of CryptoPunks
CryptoPunk #8348 is one of the rarest in the collection and the only one with seven unique traits, significantly boosting its value. Seedphrase initially purchased it in May 2020 for 85 ETH (~$18,000 at the time). Since then, the NFT has not only become a valuable asset but also part of the owner's digital identity.
Seedphrase compared using a CryptoPunk as collateral to leveraging a masterpiece, such as a Picasso painting, in traditional finance. According to him, this move highlights how NFTs are evolving from cultural artifacts into dynamic financial instruments. This marks a revolutionary shift in how we view digital assets and liquidity.
The deal allowed Seedphrase to access a significant sum without selling the asset, enabling further investments in the crypto market, particularly during the onset of a new bullish cycle.
Competition Among Collections
According to Cryptoslam, CryptoPunks have held steady in second place for trading volume over the past month, trailing only BRC-20 NFTs on Bitcoin Ordinals. Among Ethereum-based collections, CryptoPunks remain dominant, with the floor price recently hitting $100,000 for the first time since June.
Their main competitor, Bored Ape Yacht Club (BAYC), has also seen its floor price rise, surpassing $50,000. However, notable TV host Jim Cramer recently commented that while he believes in digital assets, he remains skeptical about BAYC, stating, "These NFTs are definitely going to zero."
How the rivalry between these top collections will evolve remains uncertain. However, experts suggest that the overall NFT market is showing signs of revival, making a broader resurgence increasingly likely.
