The curious case of the collector who decided to ‘hodl’

Sometimes, it’s best to “hodl” — even if it means embarrassing one of the biggest art auction houses on earth.

Earlier this week, a historically high-priced Sotheby’s auction for 104 Crypto Punk non-fungible tokens (NFTs) was abruptly withdrawn. NFTs have become a highly lucrative asset class in their own right, powered by the soaring popularity of smart-contract digital tokens like Ethereum (ETH-USD), with the unique images seeing eye-popping sales amid booming mainstream interest.

But minutes before the auction, Sotheby’s announced that, following discussions with the collector the Crypto Punk, the sale would be cancelled. The pseudonymous collector, Ox650d, confirmed that he decided to “hodl” — using the cryptocurrency term for ‘holding’ an asset.

The exact reason why the mysterious collector chose to pull out remains a mystery. However, Ox650 had previously expressed optimism about the sale, saying earlier this month the auction offered the collection prominence it hasn’t yet received from the broader fine art market.

“I simply could not pass up the opportunity to elevate CryptoPunks in the international art community. And with this sale, the CryptoPunk collection will be solidified in the broader art world,” Ox650d wrote over Twitter.

The collector did not respond to Yahoo Finance’s request for comment, but boasted over Twitter how the decision may have nevertheless accomplished the same goal they originally set out to achieve.

Over the past year, Sotheby’s, as well as their rival auction house Christie’s, have generated major revenue and fanfare from the sale of NFTs. Back in September, Sotheby’s sold a similar lot of 101 NFTs from the Bored Ape Yacht Club in a single auction lot for $24 million.

A Sotheby’s spokesperson did not respond to Yahoo Finance’s request for comment.

The cancellation came during a week when NFT investor confidence has taken a massive hit, according to Noelle Acheson, head of market insights at crypto prime broker, Genesis. Last week, hackers stole approximately $3 million worth of NFTs from 17 different Open Sea customer wallets, thanks to a previously executed phishing attack sent to customer emails.

Story continues

“This is the largest NFT exploit to date, impacting one of the industry’s largest NFT platform by sales,”Acheson wrote in a research note this week.

“Heavy loss in one part of crypto is likely to weigh on other parts of the market to varying degrees,” Acheson added.

Lack of demand for NFTs is one possible theory for why the Sotheby’s auction was yanked. After seeing trading volumes peak at record highs in January, trading and fees revenues on Open Sea — the largest NFT marketplace — halved by the beginning of February, according to crypto data provider Dune Analytics. The drop coincided with an intense period of volatility in crypto, which has been weighed by widespread risk aversion.

David Hollerith covers cryptocurrency for Yahoo Finance. Follow him @dshollers.

Read the latest financial and business news from Yahoo Finance

Read the latest cryptocurrency and bitcoin news from Yahoo Finance

Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn