Just over two years ago, Jack Dorsey, the co-founder and ex-CEO of Twitter, carved a unique niche in the digital world by turning the first-ever Tweet into a non-fungible token (NFT).
This significant pivot in the interplay of technology, social media, and digital art made waves in the digital assets market. However, the recent trajectory of Dorsey’s historic NFT leaves market watchers in a state of surprise.
The fall from grace of Dorsey’s NFT
What was once sold for an astounding $2.9 million has taken an unexpected nosedive. The recent ground-floor bid for Dorsey’s epoch-making NFT stands at a paltry $1.14.
Dorsey, ever the philanthropist, had converted the hefty sale proceeds into Bitcoin, generously forwarding the sum to Give Directly, an organization dedicated to offering unconditional aid to the world’s poorest.
Sina Estavi, the current owner of Dorsey’s NFT and the CEO of Bridge Oracle, a Malaysia-based cryptocurrency firm, hoped to repeat Dorsey’s philanthropic feat.
Estavi intended to sell the NFT for $48 million, with half of the proceeds earmarked for charity. However, market dynamics dictated otherwise, rendering his noble intentions unfulfilled.
A rollercoaster journey in the crypto world
The story of Dorsey’s NFT sale cannot be fully told without exploring the broader context. When Estavi bought the NFT, the tech and crypto ventures were hitting an unprecedented high.
Amazon had just reported a 220% profit increase compared to the previous year’s quarter, and the S&P 500 touched record heights driven by technology stocks. The NFT market mirrored this boom, with an NFT of a New York Times column auctioned for over half a million dollars.
However, the ecstasy of this bull market was short-lived. The tech industry faced widespread layoffs. Notable cryptocurrency startups such as Celcius, Terra, and FTX filed for bankruptcy. The once-thriving NFT industry experienced a massive downturn.
Despite the downswing, 2022 still marked a 67.57% increase in NFT sales from 2021, reflecting the tenacity of the NFT market. A brighter future was anticipated for 2023, with a bear market supposedly behind and an era of exponential growth ahead. Unfortunately, the expectations fell short.
The NFT market has experienced a sharp decline, with the weekly sales count recording its worst performance since June 2021. The average daily trading volume was just around $16 million, and on a year-to-date basis, the total NFT volume rose only by 11%.
This gloomy scenario for the NFT market contrasts starkly with the broader digital assets market, which saw a growth of 48% during the same period. This divergence signifies a disconnect between the two markets, painting a stark image of the challenges facing the NFT sector.
To add to these complexities, internal disputes within the NFT space, primarily regarding the marketplace Blur’s policies, have added to the market volatility. The very strategies designed to incentivize trading have inadvertently resulted in a crash of floor prices, highlighting the sector’s precarious position.
Today, Dorsey’s historic tweet-turned-NFT stands as a testament to the unpredictable nature of the crypto market. As NFT enthusiasts, stakeholders, and investors grapple with market realities, the future of the NFT industry hangs in the balance.
