Are NFT’s Dying? Why Did The “Jack Dorsey’s First Tweet” NFT Resale Flop?
A little over a year after the “Jack Dorsey’s First Tweet” nonfungible token sold for US$2.9 million, its buyer, crypto entrepreneur Sina Estavi, tried to sell it for US$48 million, only for the auction to close with a top bid of only US$208. No, that’s not a typo.
The NFT, as the title suggests, is a copy of the first tweet of Jack Dorsey, Twitter (NYSE: TWTR) co-founder and former CEO. It was sold in March 2021 through the Valuables platform, a blockchain-powered social network run by Cent.
The buyer Estavi, CEO of Bridge Oracle, won this particular NFT in a bidding war with tech entrepreneur Justin Sun. He also put a bid of US$1.12 million on an NFT of a tweet by Elon Musk. At the time, Estavi claimed that by bidding on these NFTs, he “wanted to emphasize the importance of NFTs on [the] future of crypto and tech sphere.”
Cut to present day: it doesn’t seem like people feel as enthusiastic about NFTs as they did last year. 2022 saw a slide in NFT sales. According to NonFungible, an NFT market tracker, the average sale price of an NFT is now below US$2,000 from over US$6,800 in January, and sales volumes have dropped from US$160 million in January to less than US$38 million on Thursday.
The Malaysia-based Iranian-born entrepreneur may have seemed to be a little too optimistic or a lot out of touch to have expected to sell the NFT for over 16 times of what he got it for.
Estavi was recently released from a nine-month prison stint, after he was arrested in Iran in for “disrupting the economic system.” And the sale might have been an attempt to fund his efforts to fix his relationship with former investors.
Dorsey converted all proceeds of the sale of his NFT to bitcoin and donated the full amount to the charity GiveDirectly, to support its Covid-19 response in Africa.
But the jury’s still out about whether NFT’s are dying. Back in February, Colborn Well, founder of the Museum of Crypto Art, told Fortune that he wasn’t as optimistic about the future of the NFT art market.
“I am prepared, I think, for a cataclysmic market crash,” he said. Bell also noted that there are more new artists looking to sell their work than collectors willing to invest.
But in a Reuters report, Modesta Masoit, director of finance and analytics at NFT research firm DappRadar, said that the market “was not in overall decline but rather consolidating after its meteoric growth.” She also noted that the decline starting in February could’ve been affected by investor caution from Russia’s attacks in Ukraine.
Information for this briefing was found via Twitter, Bloomberg and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.