In December 2020, Jack Dorsey created a non-fungible token (NFT) from his first Twitter. mail. Turned a static image of a five word tweet into a digital file stored on a blockchain and voila, an NFT was born. A few months later, the picture sold for an impressive $2.9 million. However, at an auction last week, no one bids over $280 for it. and even current offers at OpenSea they only amount to around $10,000, a 99% drop in value. What happened?
Dorsey’s NFT initially aroused little interest, with some people offering a few thousand dollars in December 2020, a time when NFTs still had few believers. But in March 2021, the market went into hype mode, with monthly sales on OpenSea rising to nearly $150 million, up from just $8 million two months earlier. Iranian crypto entrepreneur Sina Estavi got caught up in the frenzy and bought Dorsey’s NFT for $2.9 million. He says Forbes paid such a hefty sum due to the uniqueness of NFT and its association with a company as valuable as Twitter.
While it could be argued that the NFT in Dorsey’s first tweet has historical significance, the $2.9 million price tag is nearly impossible to justify. The bubble price Estavi paid epitomizes the older fool theory at work. “What is the use of that NFT? Jack Dorsey invites you to dinner in Silicon Valley? says Mitch Lacsamana, an NFT collector and head of marketing for an NFT trade group. “What is the real value proposition here? I think time has probably told us, and it’s probably nothing.”
On April 5, Estavi put the NFT up for auction for 14,969 ether, or about $50 million. Embarrassingly, no one bid more than $280. Estavi says “nobody knows” why the offers were so low. It seems that few people took it seriously. “The bidders realized what it was: a publicity stunt. A way to get exposure,” says Blake Moser, an NFT collector who has nearly 400 NFTs. “I think Sina Estavi achieved what he was looking for: exposure to his NFT.”
It has indeed attracted attention, but seems very out of touch with the rapidly changing NFT market. “The market isn’t ready to jump into literally anything that a celebrity or someone of great stature can jump into,” says Lacsamana. “I think last year was a really good time for that, but a lot of people have gotten tired of the cash grab tactics.”
While the failed auction shows that the NFT hype has subsided, the market is still very active, with trading volume hovering between $2-3bn per month on OpenSea, up from $150m a year ago. anus. Prices for some NFT collections like Bored Ape Yacht Club remain near all-time highs.
Estavi’s Dorsey NFT saga appears to be a case of an ill-advised $2.9 million purchase, buyer’s remorse, and a new bid for attention. Estavi himself has an incomplete story. Its startup, Oracle Bridge, says it will allow blockchain platforms to more easily ingest data, but today it appears to be little more than a white paper. Estavi also claims that he was arrested last year in Iran and had to close the company for nine months while in prison. “I was accused of disrupting the economic system,” he says vaguely. He is now trying to get the company up and running again.
Over the past day, bids for Dorsey’s NFT tweet have risen to around $10,000. Estavi says he won’t sell for less than $50 million.