Today Visa announced that it had bought a CryptoPunk non-fungible token (NFT) for which it paid almost $150,000. Visa’s crypto lead Cuy Sheffield said the primary reason for the purchase was to have first-hand experience of the process through its work with partner Anchorage Digital.
Visa wants to partner with the community to make NFTs usable and accessible. “Enabling buyers and sellers is what we do,” said Sheffield. A short term objective is to help businesses and brands mint and sell NFTs, and it even published a paper providing some hints about what’s involved.
But that’s only a first step and Visa is working on “concepts and partnerships” that will support NFT buyers, sellers and creators.
It may seem counterintuitive that encouraging cryptocurrency is in Visa’s interests, given it’s an incumbent. Only time will tell long term in terms of how it evolves. But short term, it seems to be. In the late July earnings call, Visa CEO Al Kelly said in the previous quarter that cryptocurrency purchases “drove over $1 billion in payments volume, which represents a significant engine of growth.” And NFTs are often big ticket items.
Visa highlighted the growing momentum in the NFT space. Marketplace Opensea passed $1 billion in sales for the month to date by August 17. That follows a record month in July where turnover topped $325 million. On August 2, Opensea CEO Devin Finzer said the company did $95 million in transactions in two days compared to $21 million for the whole of 2020.
While sports can potentially take the technology mainstream, the CryptoPunk bought by Visa highlights that it’s still a niche space. It was sold by ‘gmoney’, who acquired it less than a month earlier for a third of the price. The seller has spent 388 Ether ($1.3 million) buying Cryptopunks, including nine in the last month.
Gmoney said in a tweet, “This is the path forward. We embrace corporations that embrace the crypto ethos. This is what is needed for mass adoption. NFT’s are the Trojan horse.”