- Sina Estavi purchased a Jack Dorsey NFT worth $2.9 million in 2021.
- The digital collectible’s value has since dropped by over 90%.
- The NFT market recorded its first-ever quarterly loss in Q3 2022, about $450 million.
YEREVAN (CoinChapter.com) — Crypto entrepreneur Sina Estavi purchased Jack Dorsey‘s first tweet’s nonfungible token (NFT) for approximately $2.9 million in 2021. But as of July 27, the digital collectible has lost over 90% of its value, now trading for $4.
just setting up my twttr— jack (@jack) March 21, 2006
Estavi tried selling the NFT in 2022 for $48 million. He only managed to garner a bid of about $25,000.
Over the year, the price valuation declined even more sharply. The next highest bid was only $280 in April 2023. And now, the highest bid is even lower.
The Performance Of The NFT Segment
In 2022, the NFT market generated about $24.7 billion in trading volume across platforms. Yet, it didn’t outperform the traditional art market, which generated $67.8 billion in trading volume in comparison.
Between April 2021 and April 2023, art-related NFT sales experienced fluctuations, with a peak in August 2021 and a decline by April 2023. The highest point of sales was in August 2021, with around 117,400 NFTs sold.
However, by April 2023, the sales had declined. The total number of NFT sales in April amounted to about 7000 units.
Furthermore, NFT trading suffered its first-ever quarterly loss, with a total loss of slightly over $450 million in Q3 2022, per NonFungible.com’s Quarterly NFT Market Report.
The Interest In Digital Collectibles Declines
The data by GoogleTends suggest that global search interest in NFTs has dropped. The peak was recorded in January 2022, while the lowest was September 2022. Moreover, the base prices of NFT collections also dropped. Some collections even experienced a 90% drop in prices.
“The NFT Emperor Has No Clothes”- Former SEC Official Proclaims
John Reed Stark, former SEC official and President of John Reed Stark Consulting, stated that this low price of the NFT is no surprise, noting that NFTs are not sound investments. He argued that the NFT marketplace is “totally rigged” and that market manipulation runs rampant.
The NFT Emperor Has No Clothes.— John Reed Stark (@JohnReedStark) July 20, 2023
Hence, it is not at all surprising that an NFT of Jack Dorsey’s first Tweet is now essentially worthless.
A fractionalized link to a JPEG of a "bored ape" with funny glasses and a colorful hat is not a sound investment, sensible means of… pic.twitter.com/GaYNklKdV4
Moreover, he added that the ecosystem rewards and encourages fraud.
In his opinion, NFTs were supposed to be completely decentralized and secure, while in reality, they are not. He argues similarly in the case of smart contracts as well. He further questioned the security and validity of said NFT contracts.
Finally, Stark argues that NFTs are a deeply flawed concept that will never be a reliable investment since it’s ripe with exploitation, con artistry, and a lack of regulation.