When a digital artwork by crypto artist Beeple fetched a sky-high price of $69.34 million at Christie's, NFT became popular all over the world overnight, and this new medium of digital art came out of the circle of Web3 and entered the mainstream art collection market.
But as the crypto market enters a bear market, the NFT market has also become sluggish, and the turnover of digital artworks by famous auction houses, including Christie's and Sotheby's, has plummeted. Until the advent of Bitcoin NFT, digital art had a new inscription "scroll", and another NFT market showed vitality.
As of January 23, 19 Bitcoin NFTs at Sotheby's auctions sold for a total of about $1.1 million, including Genesis Cat, a digital art image minted by visual artist FAR (Francisco Alarcon) on the Bitcoin blockchain network, for $254,000, but this is not the highest.
Last December, Bitcoin NFT artwork debuted at Sotheby's, with three Super Mario-themed pixel-art digital artworks selling for about $450,000, about five times their highest estimate.
In contrast to earlier Ethereum NFTs, Bitcoin NFTs utilize protocol tools that are fully stored on the Bitcoin network. Bitcoin is the world's largest blockchain network by market capitalization in terms of crypto asset market capitalization, currently at $7,846.6 trillion.
Taproot Wizards is the developer of the tools that have added a new feature to blockchain networks that were previously thought to be only available for Bitcoin transaction records, which is why its Bitcoin NFTs sell for a high price. Using this tool, more NFT works are emerging in the Bitcoin ecosystem, and everyone can mint them.
$254,000 sold 12 times above estimate
After Rainbow Cat and Crypto Cat, another cat-themed NFT has become popular. On January 22, the NFT, named Genesis Cat, sold for $254,000 at Sotheby's, the world's leading art and luxury auction house, more than 12 times the lot's estimate of $15,000 to $20,000.
Genesis Cat 登陆苏富比拍卖平台
This high-priced NFT artwork was created on the Bitcoin blockchain network by visual arts and technology artist/engineer FAR (Francisco Alarcon), while Genesis Cat is a single piece of digital artwork from the Quantum Cat NFT collection. Quantum Cats will be the first NFT series released by Taproot Wizards, the developer of the Bitcoin Ordinals protocol, consisting of 3,333 Bitcoin NFTs with cat images.
Genesis Cat is not the most valuable Bitcoin NFT ever sold at Sotheby's.
Previously, in December 2023, the long-established auction house auctioned its first Bitcoin NFT creation, a pixel-style Super Mario-style image set, which sold for about $450,000, about five times its highest estimate. As of January 23, 19 Bitcoin NFTs have been sold at Sotheby's auctions, with a total price of about $1.1 million.
The Mario-themed Bitcoin NFT collection sold for $450,000
If you trace the history of Sotheby's NFT auctions, it is not difficult to find that a series of Bitcoin NFTs are not sky-high.
The auction house first stepped into NFT digital artwork in 2021 and set a number of record-breaking turnovers, such as CryptoPunk No. 7623, which sold for $11.75 million, and the Bored Ape Yacht Club collection, the most sold collection, with a total of 23,598 NFTs for a total of $14 million.
Part of the statistics of the NFTs auctioned by Sotheby's
But as time goes on, the price of the NFT artwork listed at Sotheby's has also become lower and lower. According to Sotheby's 2021 annual report, its auction turnover in 2021 totaled $7.3 billion, a record for more than 200 years, and NFT collectibles sold $100 million at auction. In 2023, digital art auctions have only generated about $35 million in turnover.
This is related to the downturn of the entire NFT market, and 2023 is undoubtedly the bleakest. CryptoSlam data shows that the overall sales of NFT markets on various blockchains in 2023 will only be $8.7 billion, far lower than the $23.734 billion in 2022. However, the number of transactions reached 90.6 million, 1.65 times that of 54.85 million in 2022.
In such a market, the emergence of Bitcoin NFT is adding fresh water to the market.
1.14 million Bitcoin NFTs in 200 days
What's special about the Genesis Cat NFT is that it is a digital art image recorded on the Bitcoin blockchain network using the Ordinals protocol, a process called an "inscription", and the result is also called an "inscription".
As the digital artwork created by Taproot Wizards, the developer of the Ordinals protocol, arrives at Sotheby's, Bitcoin inscriptions are being sold on the market at an unprecedented rate.
Cryptoslam data shows that as of January 25, Bitcoin NFT sales have reached $2.141 billion, with a total of 1.874 million transactions, while the best-selling Ethereum NFT sales have reached $42.188 billion, with a total of 45.497 million transactions. Although the total sales of Bitcoin NFTs are only 5% of Ethereum NFTs, this data was created by the Bitcoin NFT market in just over 200 days.
Bitcoin NFTs have had more buyers than sellers in the past year
Since the launch of the Ordinals protocol in March 2023 and the ability of the Bitcoin blockchain network to create NFTs, 1.14 million image inscriptions have been created in 200 days. In the same amount of time, this speed far exceeds that of the "old bases" of NFTs - 1.14 million is the total number of NFTs produced on the Ethereum, Solana, and Polygon blockchain networks in the first 200 days.
Why is Bitcoin NFT growing so fast? It has to do with how the market sees its value.
Unlike NFTs on other blockchain networks such as Ethereum, Bitcoin NFTs are created and stored on the Bitcoin blockchain. On other blockchain networks with smart contract functions, NFT creation and transaction data are recorded, but images, text, and even video content are in fact stored off-chain.
The Ordinals protocol provides the Bitcoin network with the ability to mint NFTs, which in simple terms, can number the smallest unit of Bitcoin, "Sat", in chronological order, and enter text, images, and even video information within the storage space allowed by the network. The result of this inscription is the Bitcoin inscription.
The "numbering" and "inscription" characteristics of inscriptions have given rise to many new crypto assets. If you will inject different annotations and different content for Sat, it will meet the characteristics of "non-fungible token" NFT, and if you inject the same annotation and the same content, it will be equivalent to producing fungible tokens such as BTC and ETH.
You know, since the birth of the Bitcoin network, the function has been to produce and record Bitcoin transactions, which are publicly traceable and cannot be modified. Since the maximum size of a Bitcoin block is only 1MB, it can record up to 4096 transactions, which is not conducive to carrying more information.
The Ordinals protocol proves that Bitcoin can actually be attached to information, and that the unique numbering content is even given a commemorative meaning due to the immutable nature of Bitcoin records, and some market audiences regard it as a "digital artifact". Of course, "lettering" on the Bitcoin network will also increase the burden on the network, resulting in an unfavorable situation where the transaction speed of the network decreases and transaction fees rise.
Not long ago, some of the core developers of the Bitcoin software system, Bitcoin Core, denounced the inscription as "worthless" due to the network failure caused by the inscription minting. However, judging from the subsequent production of Bitcoin NFTs and related tokens, market participants seem to pay attention to the attitude of developers.
The successful auction of Bitcoin NFTs such as Genesis Cat at Sotheby's is also a testament to the interest of the digital art investment market in Bitcoin NFTs. And a report by Galaxy Research and Mining predicts that the market for inscriptions created by Ordinals will reach a market value of $5 billion by 2025.