In March 2021, Twitter’s ex-chief executive and co-founder Jack Dorsey announced that he would be selling his first-ever tweet as a non-fungible token (NFT) through an auction. The latter fetched $2.9 million, and was purchased by Sina Estavi, chief executive of blockchain platform Bridge Oracle. Last week, Estavi put up the tweet NFT for re-auction, setting a $50 million target price and pledging a 50% donation if it met the auction target. At its close, it received a highest bid of $280 – less than 1/10000th the price at which Estavi had purchased it.
While the tweet has since seen higher post-auction bids of up to 1.5 ETH (approx. $4,650), the price still remains a far cry from the $50 million goal that Estavi had expected to meet. This shows what many experts have been warning about – the volatile nature of NFTs and a lack of durability in their prices.
NFTs, or digital art (or any property, such as a tweet), saw their popularity soar in common parlance through 2021. The technology uses an encrypted digital signature to denote any digital art, post or other entities as a unique one, and therefore, possess the same value as a unique object in the physical world. However, many have questioned the longevity of value of these NFTs.
For instance, for Dorsey’s tweet, questions were raised as to what value would remain if the tweet was to be deleted for any reason.
Market data, too, suggests that there is a dwindling sense of demand in NFTs in recent times. As of Wednesday, April 13, data from NFT market tracker NonFungible states that the average price of an NFT sold across marketplaces was $1,427, with a total of just over 26,500 NFTs sold around the world. In comparison, average prices of NFTs crossed $7,900 in March 2022 and have been steadily declining since then. The number of NFTs sold per day peaked at around 210,000 in late September, 2021, and has gradually declined since then as well.
A report by Fortune in December 2021 stated that the market capitalisation of all NFTs around the world crossed $23 billion at the end of last year, surpassing the overall market cap of many well-known companies around the world. As of April 14, data from CoinMarketCap states that the value of the world’s NFTs is around $10 billion – down by a whopping 77% since last month.
Estavi has since stated that he may choose to never sell the tweet, unless he receives an appropriate bid. Going by the auction, the chances of a $50 million bid seems unlikely at the moment – although last-minute price surges in this space are never out of the question.