In this dazzling spectacle of pixels and algorithms, we take a wild ride through the digital wonderland of generative art and NFTs against the broad strokes of Sotheby's Grails II auction. 

But will generative art be the glorious renaissance that propels the merger of NFTs and art to new heights, or are we merely floating in a bubble of digital delusion? And more importantly, how can NFT investors capitalise on the asset class?

There are no sacred cows. Today, we question all the assumptions about the very nature of artistic expression and the value of virtual masterpieces.

TLDR 📃

• Will generative art from Sotheby's Grails II auction reignite interest in NFTs? Only one way to find out!
• The NFTs got a whiplash in the aftermath of the SEC’s charges against Coinbase and Binance.
• An anonymous whale brought a  $10M war chest; went on a shopping spree with Bored Ape Yacht Club and Mutant Ape Yacht Club.
• Sotheby's Grails II auction is like a buffet of visual goodness. We’ve got everything from the mesmerising Fidenzas to the captivating Chromie Squiggles and the legendary Ringers collection.
• What does all this mean for you? Expect a surge in demand for digital art in general.

Disclaimer: Not financial or investment advice. Any capital-related decisions you make are your responsibility and yours only.

Market overview 🛒

One thing is for sure, the colourful intersection of arts and NFTs is where digital masterpieces are born and fortunes are made. 

However, With the bombshell news this week that the SEC charged Coinbase and Binance for operating as Unregistered Securities Exchanges, crypto valuations tumbled across the board. $ETH lost $200 from $1,850 to $1,650, having a knock-on effect on NFT valuations which are calculated in ETH. 

Amidst the chaos, a mysterious figure emerged from the depths of anonymity, wielding a hefty $10 million war chest. This whale embarked on a shopping spree to purchase 75 BAYCs, and 62 MAYCs and then staking $2M in Apecoin. 

It is not hyperbole to say this mysterious entity is single-handedly propping up the Bluechip NFT market, maintaining BAYC’s floor at 47 ETH and MAYC at 9.1ETH while being projected to make $118k a month in Apecoin rewards.

The result? The increased liquidity from the actions of the unknown whale generated a staggering 960 ETH ($1.584M) in sales. To demonstrate the PvP nature of the space. Earlier today, a well-known farmer sold 106 MAYCs faster than you can say, "Generate some cash!"

But hold on folks; while history doesn’t always repeat itself, it tends to rhyme. And suppose the trends of the previous sales of this size are anything to go by. 

In that case, you can expect the floor price of the impacted collection to slowly trend down over the following 2 weeks. Based on this reason, we would not recommend any MAYC purchases in the near future. That said,  this could, in fact, provide a great opportunity to “short” the collection.

Here's what we know about Sotheby’s Grails Part II 🔖

Now, let's shift our focus to the main event: Sotheby's Grails Part II, an auction that has the NFT world buzzing with excitement. This is the second in a series of auctions selling the 3ACs collection of rare generative art NFTs to recoup losses due to bankruptcy.

A quick word on generative art. It's like art on autopilot!

But here's the thing: How do you prove that you own these digital masterpieces? That's where NFTs save the day! These non-fungible tokens provide clear proof of ownership and authenticity, making it a breeze to sell and trade these digital artworks online. 

As we prepare for Sotheby's Grails Part II, one piece has everyone buzzing with anticipation. Can you guess which one?

Major generative art pieces to be auctioned 🤑

It’s like a buffet of visual goodness. We’ve got everything from the mesmerising Fidenzas birthed from Tyler Hobbs' genius mind to the captivating Chromie Squiggles that have become symbols of the web3 art movement.

Fidenzas

Minted in 2021, Fidenzas are the brainchild of Tyler Hobbs. Considered to be his first real work of long-form generative art, Fidenzas use a flow field algorithm to produce unique artistic outputs.

As one of the earliest and most iconic forms of NFT Gen Art, Fidenzas have boasted historical sales of up to $8.5M for the rarest pieces in a collection capped at just 999.

6 are up for auction at Sotheby’s, including the exceedingly rare Fidenza’s 216 and 479. Fidenza 216 is 1 of only 35 spirals and already has a reserve bid of $300k, with a similar piece listed on Opensea for $400k. 

Fidenza 479 is the grail Tyler Hobbs piece in this auction. This Fidenza is only 1 of 26 in black and 1 of 2 boasting black colours and a micro-uniform scale. A $617k bid has already been placed, and interest in this piece is high.

In the build-up, demand for Fidenzas on the open market has surged, with six sales in the last week. This included Alexis Ohanian’s purchase of Fidenza 646 (another black Fidenza) for 130 ETH and an anonymous buyer's 625 ETH ($1.17M) purchase of iconic Fidenza 545.

Chromie Squiggles 

Let us not forget the Chromie Squiggles, those animated marvels birthed by Erick Calderon, a.k.a. Snowfro, the visionary founder of Art Blocks. Erick describes Squiggles as "Simple and easily identifiable", with the collection becoming one of the symbols for the web3 art movement.

2 Chromie Squiggles will be on the auction block on Thursday: Squiggle 9071 and the iconic Squiggle 1780. 

Squiggles are a collection of 10k animated pieces that popularised the random mint mechanic that has spread to all NFT collections.

Chromie Squiggle 1780 represents the rarest type within this historical collection, the much coveted “Perfect Spectrum”.

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There are three special "types" of Chromie Squiggles: 

1. Hyper Rainbow - 1% of the collection
2. Full Spectrum - 0.4% of the collection
3. Perfect Spectrum - 0.2% of the collection

Hyper Rainbows are incredibly colourful, but the rarer Perfect Spectrum includes every colour exactly once. Full Spectrum is within 1.5% of Perfect.

Chromie Squiggle 1780 is 1 of only 22 Perfect Spectrums. There have only ever been 4 Perfect Spectrum sales, including two at $750k and the last sale of Squiggle 7583 for a whopping $2.7m (all during 2021). Expect to see a price north of $500k for this Squiggle. 

Autoglyphs 

But wait, there's more! Enter the world of Autoglyphs, where Larva Labs, the creators of Cryptopunks, once again pushed the boundaries of artistic innovation.

The team ensured the code to create the images was on-chain, creating a new paradigm for art longevity without external dependencies. Consisting of 512 pieces, each is a unique arrangement of characters created by code and deployed on the blockchain.

Autoglyphs are the 1st on-chain generative artworks on Ethereum. They are the precursors to the generative art we know and love today. Because all the code had to be on-chain, the images are simple yet conceptually powerful. Just a month ago, Autoglyph 187 was auctioned at Sotheby's for $571,500. 

Autoglyph 218 is the second most common type of glyph, while 187 was the 5th rarest type, so expect it to sell within the $300k - $350k range.

Ringers

And now, we reach top rung of the generative art ladder—the pièce de résistance—the legendary Ringers collection. Created by Dmitri Cherniak, Ringers brought the masses into the world of generative art, forever altering the landscape. 

Ringers is a series of 1000 NFTs using different combinations of string and peg layouts to create unique geometric works of art without human interaction.

There are 4 Ringers for sale, including one of the most sought-after items in generative art history, Ringer 878, also known as “The Goose”.

Launching January 31st 2021, on the Art Blocks platform, Ringers hold the rep for being the collection that brought generative art to the web3 masses. 

Don’t just take our word for it. Three experts discuss why “The Goose” is valued so highly in the gen art world.

And true to form, the Goose already has the record for the second most expensive sale in the Ringers collection, being purchased for 1800 ETH ($5.9M) on August 27th 2021, by 3AC. This only falls behind the most expensive generative art purchase of all time, Ringer 109, which was sold for 2100 ETH ($7.1M) on Oct 2nd 2021.

Currently, predictions are for the sale to fetch something between the $2M - $3M range. Still, from our knowledge of the market, a figure north of $5M is realistic.

Cryptonary’s take 🧠

Alright, folks, let's wrap it up! Digital art has become the shining example of what NFTs can do. We’ve eliminated most of the issues artists had with provenance, authenticity, scarcity and the method of selling digital pieces.

For collectors and investors looking to park funds in a haven for the long haul, digital art is already proving to be a store of value, with notable collections showing incredible resilience during this bear market.

Now, if you're wondering how to get in on the action, look no further than the Art Blocks gang. Their generative art creations like Squiggles, Fidenza, Ringers, Archetype, and Subscape have made quite the splash. All keep an eye on Autoglyphs, those pioneers of generative art history. They're like the rock stars of the genre!

Get ready because we're calling it now—the upcoming Sotheby's auction will be a massive hit, causing a frenzy for digital art across the board.

And if we had to pick one hot ticket item, it's got to be Ringers. With its current 42 ETH floor, brace yourselves for an explosion of demand and price action after The Goose sale. You snooze, you lose!

As always, thank you for reading. Cryptonary, Out!