Sotheby’s auction house recently disclosed that digital collectibles owned by the bankrupt Singaporean crypto hedge fund Three Arrows Capital (3AC) fetched a staggering $10.9 million in a New York auction on June 15. Last year, 3AC had been the first major crypto firm to file for bankruptcy, following the collapse of Luna and TerraUSD cryptocurrencies.
Before filing for Chapter 11 bankruptcy, 3AC had amassed an impressive collection of non-fungible tokens (NFTs). These unique digital collectibles act as proof of ownership for various items such as images, videos, artwork, or text fragments. In February, it was announced that select NFTs held by 3AC would be made available for sale, as part of an effort to raise funds for the firm’s creditors.
Based on blockchain tracker DappRadar’s data, 3AC spent $15.5 million worth of crypto to acquire the 37 NFTs in several rounds of purchases between July and August 2021. Among these NFTs, “The Goose,” a unique piece by Canadian artist Dimitri Cherniak, was sold for $6.2 million – fetching $0.3 million more than what 3AC had initially spent acquiring it in August 2021. Another seven NFTs owned by 3AC were sold back in May, raising an impressive $2.5 million at the auction.
Such high sales figures, according to Sotheby’s Michael Bouhanna, showed a growing interest in NFTs among both non-crypto and non-NFT collectors. Despite existing as digital entities freely accessible online, most of the NFTs were accompanied by physical print copies for the buyers to display.
However, there have been signs of the intense speculative craze surrounding NFTs beginning to wane, as sales have dropped from a peak of approximately $5.7 billion in January 2022 to around $675 million in May 2023. This decline can be partly attributed to the general air of Fear, Uncertainty, and Doubt (FUD) prevalent in the market, making participants more cautious and risk-averse.
Given this drop in NFT sales and the bankruptcy of prominent crypto firms like 3AC, it’s essential for collectors and enthusiasts to tread carefully when navigating the world of digital assets. While NFTs have garnered quite a buzz and gained significant momentum in recent years, they remain subject to the ups and downs of the broader market landscape. As with any investment, vigilance and a clear understanding of the risks involved are crucial for success.
Source: Cryptonews
