Next Gen Investing

Sotheby's will auction a CryptoPunk NFT next week—and it could sell for millions of dollars

A truck parked outside of Christie's auction house displays a CryptoPunk digital art non-fungible token (NFT) on electronic billboards on May 11, 2021 in New York City.
Dia Dipasupil | Getty Images Entertainment | Getty Images

Along with other unique NFTs, or nonfungible tokens, Sotheby's will auction a rare CryptoPunk as part of its Natively Digital: A Curated NFT Sale next week.

The CryptoPunk, number 7523, will be sold on June 10, with advanced bidding beginning on Thursday, according to Sotheby's.

CryptoPunks are an assortment of 24x24 pixelated avatars. There are a total of 10,000 in existence, and no two are exactly alike. Each has its own unique features and accessories.

Known as one of the earliest NFT projects, CryptoPunks was launched in 2017 by Larva Labs founders Matt Hall and John Watkinson. Originally, CryptoPunks were offered all for free, but have recently sold for millions of dollars.

Dubbed "Covid Alien," CryptoPunk 7523 is considered to be a rare collectible. It is one of nine "alien punks" in the entire series and is the only one with a mask.

Its current owner, known under the pseudonym Sillytuna, bought CryptoPunk 7523 earlier this year, as the NFT collector alluded on Twitter in May.

"With the Beeple sale [then] imminent, I was sure #CryptoPunks were going to explode further so I braved a crazy NFT purchase again — the Covid Alien," Sillytuna wrote.

Sillytuna added, "I knew I'd have options but was also prepared to hold for years. I'm a believer in #CryptoPunks as avatars and VIPs, as should you be."

As an early crypto and NFT collector, Sillytuna has a portfolio of other crypto assets, including many other CryptoPunks.

The last public sale of CryptoPunk 7523 was in 2017 for 8 ether, which was then worth $1,646. However, Sillytuna reportedly got the NFT more recently for an undisclosed amount — it isn't recorded publicly as typical sales are because it was done as an OTC, or over-the-counter, trade, Sillytuna told Cointelegraph.

While CryptoPunk 7523 does not have a published estimate, two other "alien punks" recently sold for more than $7.5 million each, according to CryptoSlam, and seven other CryptoPunks sold for over $1 million. In May, a collection of nine CryptoPunks sold for nearly $17 million at Christie's.

"CryptoPunks have become among the most sought after NFTs on the market," Michael Bouhanna, contemporary art specialist at Sotheby's, tells CNBC Make It. "We've seen strong interest from both traditional art clients and collectors from the NFT community — and bidding starts at only $100."

In the past 30 days alone, there has been over $64 million in CryptoPunks sales, CryptoSlam found.

Sillytuna doesn't plan to keep all the profit, and will donate 10% of sale proceeds, according to a Sotheby's press release. Of that 10%, 5% will be given to Larva Labs to support development of more NFT projects, and the other 5% will be donated to Covid-19 relief organizations.

Sotheby's will also donate a portion of its proceeds to nonprofit organizations within the NFT community, including the Sevens Foundation, which focuses on elevating artists.

As part of the Natively Digital: A Curated NFT Sale, other works will also be sold alongside CryptoPunk 7523, including the "first" NFT created by Kevin McCoy, and pieces by popular crypto artists Sarah Zucker and Matt Kane.

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