Sina Estiva, a cryptocurrency entrepreneur from Iran, paid a staggering $2.9 million (1630.6 ETH) in March 2022 to acquire Twitter creator Jack Dorsey’s first-ever tweet NFT (Non-Fungible Token). As of now, the tweet is available for a price of just around $97. The so-called genesis tweet, which says “just setting up my twttr,” was initially sold to Estavi by Dorsey in an auction.
Estavi secured the sale by outbidding Tron’s creator Justin Sun, who had placed a bid of $2,000,000 for the piece. Following the completion of the sale, Estavi declared on Twitter that he intended to sell the asset and promised to donate close to 50% of the revenues, or approximately $25 million, to a charitable organization. However, as luck would have it, Jack Dorsey’s first-ever tweet NFT’s price ended up being significantly lower than expected.
At the end of the initial auction, which took place at the beginning of April, the NFT only managed to secure seven bids on OpenSea, with the highest price coming in at 0.09 ETH, which was equivalent to approximately $277 at the time. Additionally, despite the fact that the collapse in the cryptocurrency market was having a negative impact on NFTs, nominal bids continued to bump up the price of Estavi’s piece. The highest bid that had been received for it as of September 16 was merely 0.075 ETH, which is equivalent to $96.49.
Lack Of Interest In The NFT space
Despite the fact that there have been several bids made, Estavi is still not willing to sell the NFT. In the past, he has been quoted as saying that he would consider a reasonable offer, but that he “might never sell it.” As seen by the protracted gaps that exist between offers, NFT collectors appear to have also lost interest in the extremely rare piece. Although there are others who hold Estavi accountable for “poor timing” and for setting an asking price that was too high for Jack Dorsey’s first-ever tweet NFT, Estavi is not the only one who has been negatively impacted by the recent steep decline in NFT values.
Snoop Dogg is one of the many celebrities that openly “aped in” amid the hoopla surrounding the year 2021. In December, Snoop Dogg purchased an NFT known as “Right Click and Save As Guy” for approximately $7 million USD (1,600 ETH). After the recent drop in the price of Ethereum, the same NFT would sell for approximately $2.08 million USD today. On the other side, in January 2022, pop singer Justin Singer shelled out $1,301,550 USD (500 ETH) to purchase Bored Ape Yacht Club (BAYC) #3001. If sold in the present day, the piece’s value would be less than half of what it was when it was first purchased by the singer.
Since November 2021, the price of Ethereum has decreased by roughly 70%, causing the value of NFTs to similarly decrease. According to data provided by Alchemy, a distributor of crypto analytics, the amount of activity in NFT marketplaces had dropped by approximately 90% by the end of the third quarter. The level of engagement among NFT developers has remained high along with the overall development of the cryptocurrency ecosystem. Having said that, considering that the majority of NFTs acquired their high price tags owing to the hype, it will be challenging to predict whether or not they will ever again sell at such premium prices or recapture the grandeur they formerly held.
Falling Volumes Of NFTs – The Main Reason?
While the price of Jack Dorsey’s first-ever tweet NFT has dropped, the overall market is showing the same trend. According to the data collected by the DappRadar analytics platform, the trade volume on OpenSea, the largest NFT marketplace in the world, plummeted by 99% in the span of four months between May and August 2022. Having said that, there have been a number of significant concerns raised over the readiness of this technology for widespread use. There is reason to be skeptical regarding the rate at which NFTs will become mainstream, as well as the question of whether or not we are merely witnessing the start of this trend or whether it will soon die out.
The NFT market is especially plagued with frauds, which is one of the primary reasons why there are so few of them in the blockchain area, whereas there are a lot of dubious enterprises. Shady developers selling simple assets on platforms make up a significant percentage of the NFT industry. Given how simple it is to create a website and sell bogus works of art or sports memorabilia, con artists saw this as an ideal opportunity to steal money from unsuspecting customers. And as a result, the market is reacting in the appropriate manner.
One of the key causes for the severe drop in pricing was the lukewarm reaction that was taken to questionable business practices in the NFT sector. Fear of missing out (FOMO) was another factor that contributed to the large increase in price that was seen in the NFT market; however, as a result of the significant drop in price, investors are now concerned about making a risky investment. Investors have lost interest in the NFT market as a result of the trend toward corporations selling just the most fundamental digital assets.
The fact that many of these low-value commodities are hanging in centralized marketplaces, which causes a significant amount of uncertainty among investors, makes this problem even worse. To summarize, the market for NFTs is collapsing and is expected to remain weak for some time. The cryptocurrency markets are extremely unpredictable, and it is impossible to predict when the next bull market will happen. This presents a challenge for investors. However, it is possible that the NFT market may become the next popular investment after prices have recovered.
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