Thesis
The NFT collectibles market was estimated to be $11.8 billion in 2020, with an expected CAGR of over 25% from 2021 to 2031. Takashi Murakami is considered by many to be a visionary and one of the greatest contemporary artists in the world. With an abandoned NFT launch and collaboration with RTFKT Studios under his belt, the NFT world has been waiting for Murakami to release an original collection. Murakami.Flowers (M.F) is the first collection released by Takashi Murakami himself.
His acceptance of the NFT space will usher new entrants into the NFT space, art collectors and artists alike. Murakami’s vague roadmap indicates that he has done thorough space research and is aware of projects that overpromise and underdeliver. The mind map discusses Murakami’s view that this project is his “start line,” indicating he will reward holders of the flowers in the future. Flowers will serve as an access point for the world’s preeminent Murakami fans and collectors, individuals who have paid more than $5 million for his work.
Assumption
Murakami’s mind map makes very few promises. The slow rollout of the project and the withholding of information in the months leading up to the drop made it predictable that the mind map would not be overly shared. This is the modus operandi of Murakami, who is looking to do innovative things to merge the traditional and NFT art worlds. His approach is two-fold,
- He doesn’t want other projects to copy his transformative perspective.
- He wants to surprise/reward holders with benefits as they are released.
CloneX volume increased by over 300% in the 24 hours before writing; this is because market participants are anticipating an NFT collection from Murakami will increase the value of a Murakami collaboration. The floor price of CloneX’s with Murakami DNA is nearly 170 ETH; a collection from Murakami himself could fall between this price and the current CloneX floor of 20 ETH.
Compounding
At a .108 mint price and seeds floor at 9.5 ETH from whitelisted sellers, a 10x or better seems more than possible. Seeds given to whitelisted individuals already have a floor price close to 10 ETH on OpenSea. Holders gaining access to a Murakami-centric DAO will increase the incentive to hold and cause the NFTs to increase in value. With 20,000 avatars and a 20 ETH floor price, the market value of CloneX is roughly 400,000 ETH (~$1.4B). Apply that valuation to M.F and find the floor price of 34.3 ETH (~$120K).
Market Size
The contemporary art market grew 36% from July 2020 to July 2021, with digital pieces doing exceptionally well in the period. Murakami sold 1,591 pieces in these 12 months, with a median estimated price of $4,300. A New York Times article written in 2005 reported that his art had done $300 million in sales volume.
The total NFT market reached $50 billion in 2021 and is expected to increase 10.1% per year to $130 billion by 2030. NFTs occupy about 16% of the $50 billion global art market.
Risk
Popular artist Damien Hirst made his first attempt at NFTs in July, with The Currency collection. This project minted $2,000 on the Palm blockchain (transferrable to Ethereum to be sold or purchased on OpenSea) and has a current 3.3 ETH floor (~$11.5K). Despite being profitable if purchased at the mint price, shortly after the launch, The Currency reached a floor of 18 ETH, making today’s floor an 82% drawdown from the peak.
Hirst’s lack of success could indicate that traditional artists transitioning into NFTs will underperform expectations. An added risk is Murakami viewing this collection as any other art collection and not committing to the community. Flowers holders will not receive the rights to the underlying artwork, an unattractive feature for some NFT collectors.
