CryptoPunks NFT Owner Sold For $7M Loss With ETH Price Crashing

A rare cryptoPunks NFT was just sold for $3.3 million which marks a $7 million loss for the seller if you take the crashing ETH prices into consideration so let’s find out more in today’s latest Ethereum news.

The tax season is coming around and this loss could end up actually saving the former owner millions if they play the cards right. The Punk #4156 whose rare traits include an “ape” appearance and a blue bandana was sold for 2691 ETH which is about $3.3 million as ETH is now trading for $1200. To the average person, this could seem like a huge amount of money for an NFT but actually, it was considered by some Punks collectors to be a lowball offer as one user wrote:

“Easily worth 25mil in my eyes.

The owner of Punk #4227 wrote after the bid was accepted:

“$3.2m is a joke for that ape but it might be tempting for the holder to accept.”

Punk 4156 bought for 2,691 ETH ($3,312,002.12 USD) by 0x67954a from 0x561786. https://t.co/GF3TCByB3Y #cryptopunks #ethereum pic.twitter.com/FXI30ORl2m

— CryptoPunks Bot (@cryptopunksbot) July 15, 2022

Before the sale today, Punk #4156 was purchased back in 2021 for 2500 ETH and this is 191 ETH less than today but worth $10.26 million since ETH was trading for more than three times the price today. This means that the seller today earned a small profit in ETH but suffered heavy losses in terms of USD Value. But why did the owner sell for a $7 million loss?

If the Cryptopunks NFT owner writes off this sale as a $7 million loss in the tax reports, it could end up being a beneficial move financially speaking. For tax purposes, the IRS could consider these losses realized at the moment of the NFT sale with the seller not having to convert that ETH into USD in order to write off the losses. The type of loss on paper is often a common practice that traders employ to reduce their capital gains liability but it is also possible that reducing the capital gains income by $7 million can even lower the tax rate and can lead to further tax benefits. One Doodles NFT holder noted:

“It’s actually really smart for tax loss harvesting if he’s sure he won’t make a positive return on that investment anytime soon.”

The seller could be engaging in a good game of tax loss harvesting but what about the buyers? One user who claims to have purchased Punk #4156 saw the purchase as a gateway to generational wealth:

“I need a Punk to yolo my life savings into generational wealth. Why did I buy them? Because I know that punks can be worth something. I will be here when the bear is over.”

🧵/ A thread why I bought this @cryptopunksnfts for $3,312,002.12 USD. https://t.co/qvtJvuMD3R

— Janik.sol  (@Jan1kkk) July 15, 2022

This is not the first notable CryptoPunk sale as the sales for NFTs were picking up recently and one was even sold for $2.6 million despite the ongoing crypto winter.