In March 2021, Twitter co-founder Jack Dorsey made headlines when he auctioned off his first tweet as a non-fungible token (NFT) for a staggering $2.9 million. The NFT, representing a digital certificate of ownership, was acquired by Sina Estavi, the CEO of Bridge Oracle, who intended to sell it for $48 million, with half the proceeds earmarked for charity.
However, the NFT’s value has taken a nosedive since then. As of July 20, the highest bid for the NFT stands at a mere $3.82, as reported by OpenSea, one of the largest NFT marketplaces. This stark decline reveals that most traders and collectors perceive the NFT to be worth far less than its original purchase price.
The sharp drop in value is not only a testament to trader sentiment but also highlights the inherent volatility of the NFT market. Similar to cryptocurrencies, NFTs are a relatively new asset class, and their value often relies heavily on speculation. Consequently, NFT prices can fluctuate dramatically, sometimes reaching millions of dollars within short periods.
In contrast, Dorsey’s first tweet as an NFT, a simple screenshot of his original tweet “just setting up my twttr,” contributed to the diminished value perception. Despite being minted on the Valuable platform, a blockchain-based social media platform, and sold on OpenSea, the actual tweet remains under Dorsey’s ownership. Consequently, the NFT holder technically only owns the digital certificate of ownership, and the tweet itself remains with Dorsey. This realization may have impacted the NFT’s perceived worth.
As a result of the recent decline in bids, Estavi’s plans to donate half of the proceeds to charity through the GiveDirectly organization may be significantly reduced, as the bids currently stand at only cents.
This sharp drop in the value of Dorsey’s NFT mirrors the overall state of the NFT market, which saw a contraction in trading activity following the decline in crypto prices in 2022. Iconic collections like CryptoPunks and Bored Ape Yacht Club (BAYC) experienced substantial drops in floor prices.
The floor price represents the minimum price at which an NFT item can be sold in the marketplace. For instance, the BAYC floor price declined by over 90% from its peak of $600,000 during the 2021 Bull Run, signaling the market’s instability and susceptibility to rapid fluctuations.
In conclusion, Jack Dorsey’s first tweet NFT serves as a stark reminder of the volatile nature of the NFT market. While NFTs continue to garner attention and fascination, they remain a speculative asset class, and their values can be subject to dramatic shifts based on various factors. As the market matures, a clearer picture of the long-term sustainability and value of NFTs may emerge.
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