Jack Dorsey’s $2.9 M. NFT Dropped 99 Percent in Value. Is the NFT Market Crumbling?

Jack Dorsey’s debut NFT was an image of the first-ever tweet posted on Twitter, which he founded in 2006. In March 2021, during the early days of the NFT boom, Dorsey’s tweet sold for $2.9 million after a competitive bidding battle in which Tron founder Justin Sun was a major player. Sun lost out to Sina Estavi, an entrepreneur who has since faced economic turmoil as his crypto-enterprises collapsed following his arrest last May.

Then, this month, Estavi listed the NFT for $48 million and tweeted that he would given 50 percent of the proceeds to GiveDirectly, a charity whose mission is to help impoverished people in certain parts of Africa. “Why not 99% of it?” Dorsey subsequently quipped.

But after Dorsey’s NFT went up for auction again this past week, no one bid higher than $280, effectively dropping the value of it by 99 percent. The highest offer now on OpenSea, where anyone can list an NFT, even if a bidding period isn’t open, is about $12,000, which is still a paltry amount. Is this a harbinger of the NFT market’s collapse?

For Jonathan Perkins, cofounder of the NFT platform SuperRare, the bungled sale is a symptom of the NFT market going through growing pains.

“There has been a lot of experimentation in the space, and I think we’re running up against the boundaries of speculation,” Perkins said, referencing the tokenization of tweets and the interest in PFP NFTs. He characterized the NFT market of 2021, especially of last summer, as one built on risk-taking behavior.

“This bubble was bound to burst,” Perkins said. “And that’s actually healthy, it makes it easier for those of us who are trying to build something long lasting, revolutionary, and accessible.”

His sentiment echoes one voiced by Art Blocks CEO Erick Calderon, whose generative art NFT platform was the site of almost unbearable volume in August of 2021.

“It’s just not good,” Calderon said at the peak of the Art Blocks market. “It’s not the future of Art Blocks, by any means.”

However, to Greg Isenberg, CEO of the web3 design firm Late Checkout, the sale hardly signifies anything at all.

“This wasn’t a real sale,” Isenberg said. “There’s only several buyers for something as big as this and the listing price was unrealistic. Serious buyers wouldn’t bid on this—I didn’t.”

Isenberg offered a metaphor for why serious buyers didn’t come to the table: “If you walk into a house that’s for sale for $48 million, you probably wouldn’t offer $500,000.” Isenberg recognized, though, that NFT buyers are now more cautious, which he said was not necessarily a bad thing.

The NFT market is young, having really only taken off in the first months of 2021, and has fluctuated wildly ever since. When Dorsey minted his first, and thus far only NFT, in December 2020, he received bids in the tens of thousands of dollars that he ultimately rejected.

“The NFT market is brand new, so it’s hard for us to understand what something is worth, especially at the high end,” Isenberg said. “Estavi shot his shot. He was like, ‘Maybe this is worth $48 million.'”