AI Art NFTs Outperform Market Amidst Low Trading Volumes and Rising Floor Prices

Despite a slowdown in NFT market volumes, AI art collections like Winds of Yawanawa and alignDRAW are outperforming, with significant price increases of 80% and 90%, respectively, over the last week.

The NFT market is experiencing a slowdown in trading volumes, but certain segments, particularly AI-generated art, are defying the trend with impressive gains. Two AI art collections, Winds of Yawanawa by Refik Anadol and alignDRAW by Elman Mansimov, have surged in value over the past week, outperforming the rest of the market.

According to data from NFT marketplace aggregator Blur, Winds of Yawanawa saw an 80% price increase, climbing from 3.9 ETH to 7 ETH, while alignDRAW jumped by 90%, moving from 0.83 ETH to 1.57 ETH. These collections have become two of the largest gainers in the NFT space, even as overall market activity remains subdued.

Other major NFT collections like Bored Ape Yacht Club, Doodles, and Pudgy Penguins also posted gains, with most appreciating between 5% and 10% over the same period. Despite these gains, NFT trading volumes are at their lowest since before the market’s 2021 boom. In August, just $148 million worth of NFTs were traded across marketplaces, a significant drop compared to early 2022, when over $100 million in daily trades was common.

The surge in AI art NFTs appears to have no clear catalyst, but both Winds of Yawanawa and alignDRAW are regarded as highly respected collections. Refik Anadol, a prominent digital artist, made history as the first NFT artist to be permanently featured at the Museum of Modern Art (MoMA). Meanwhile, alignDRAW is considered a groundbreaking retroactive mint of the earliest text-to-image prompts, first generated in 2015 and now officially endorsed by its creator, Elman Mansimov.

Elsewhere in the NFT market, CryptoPunks have rallied over the past month, with floor prices rising from 20 ETH on August 6 to 28 ETH. This rise has been fueled by high-profile sales, including a rare “hoodie zombie” selling for $1.3 million and a “3D glasses hoodie” for $700,000. Additionally, an alien-trait CryptoPunk sold on August 21, although the price remains undisclosed; the last alien Punk sale in April fetched $12 million.

The rise in NFT prices despite low trading volumes has sparked discussions around the role of marketplace incentives, particularly from platforms like Blur. Blur’s farming mechanisms, designed to reward high bidding and frequent undercutting of floor prices, have been criticized for distorting the market. Some argue that these mechanisms delayed a broader price collapse, while others believe they drove away serious buyers, leading to overselling in major collections.

Bored Ape Yacht Club, for example, is up 27% since Blur’s Blast airdrop on June 26, reflecting the mixed impact of such incentive programs on NFT pricing.

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