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NFT Price Manipulation: What Is It and How Does It Work?

Source: TheDigitalArtist

The explosion of non-fungible tokens (NFTs) has taken over a large portion of the cryptocurrency space this year. These unique crypto-assets have spread in the world of art and sports collectors, and their sales have been trending in recent months.

In order to know whether the exorbitant prices associated with NFTs are a reflection of their actual value, or are the prices driven up by price manipulation, this article will discuss NFT price manipulation and how it works.

What is NFT price manipulation? 

By Mike Winkelmann (Beeple) –, Fair use,

The Floor Is Rising podcast touched upon the NFT price manipulation as one of the main reasons why people don’t want to get into NFTs, as they feel that NFTs suffer from market manipulation and scams.

For example, many people in the NFT sphere and beyond know of MetaKovan’s (Vignesh Sundaresan) purchase of Beeple’s Everydays: The First 5000 Days, which set a world record for an NFT sale, at approximately $70 million USD.

However, many don’t know that before MetaKovan’s purchase of 5000 Days, MetaKovan bought 20 Beeple’s one-of-ones (singular, unique ‘editions’ ). He managed those purchases through a series of proxy or dummy bidders, effectively acquiring every single one-of-one edition of Beeple’s work at a single event.

This raises the question of why MetaKovan would spend $70 million a few weeks later on acquiring Beeple’s 5000 Days. The answer is to inflate the price of his previous acquisitions. By driving up the price of 5000 Days and purchasing the piece for $70 million, MetaKovan inflated Beeple’s worth as an artist, and by extent, the monetary value of his works of art, which are now in MetaKovan’s possession, and most likely to be displayed in Metaverse digital museum.

This isn’t an isolated event on the NFT market, but unfortunately, people who promote NFTs don’t actually want to discuss the issue of price manipulation and wash trading in the NFT world, mainly because they feel it would damage the NFT marketplace.

How does NFT price manipulation work?


The NFT price manipulation is best explained via an example. CryptoPunks is the world’s most famous NFT collectible and one of the earliest NFTs developed on the Ethereum blockchain technology. Its price went from one ETH (Ethereum) to six ETH in a period from July to September/October last year.

This price increase can be attributed to the opening of the Rarible platform, which incentivized usage through the distribution of the Rari tokens to both buyers and sellers. This incentive prompted people to start buying and selling in bigger volumes.

The more you sold on Rarible, or the more you bought, the more tokens you’d earn from those transactions. Since a large amount of CryptoPunks sales were happening at the same time on Rarible, the price of CryptoPunks on the crypto market skyrocketed for a period of time. Not only did the price skyrocket, but the amount of Rari tokens received for the sales outweighed potential losses.

Ramifications of NFT price manipulation

NFT price manipulation has had some unwelcome consequences. The world of NFT arts gave birth to artists who rise too quickly, too fast, as they’re usually endorsed by an individual or a group of collectors who are trying to inflate the price of their work. What happens when those investors and collectors disappear?

The world of traditional arts is filled with well-established artists, backed up by a general consensus of their work’s value. If one of the collectors drops out, the rest of the art world still recognizes the value of a particular artist’s work.

However, in the world of NFTs, where the monetary value of an artist’s work is inflated and manipulated by a single individual or a group, there’s no real consensual value. Thus, when private collectors or groups fall off the map, the artist’s price collapses at the next auction.

Since the price manipulation happens so frequently, up to the point of transparency, those who base their purchasing decisions on the price action of NFTs are most likely to become the victims of market volatility.

Crypto exchanges are regulated by various government agencies, but NFTs are still very unregulated, and there’s now a strong incentive to replicate the mechanisms and dynamics of the traditional art world and apply them to NFTs.

This would include gatekeeping as a business model for NFT platforms, which could prove authoritative in determining the artists’ worth. This way, they could still cater to a specific group while maintaining the long-term career benefits for their artists.

On the other hand, this also opens the door for individuals to gain some notoriety and influence on social media and become curators connoisseurs of NFT art. This would help them make special deals and offload the works that they’ve purchased low for a higher price.


Currently, there’s at least some extent of price manipulation in nearly every single NFT sale in the market, and trading on a short-term basis exposes people to market vagaries to a much bigger extent.

The manipulation isn’t likely to stop unless traditional art world methodologies find their way into NFT art and markets begin gatekeeping and catering to a specific clientele.

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