From millions to pennies: the astonishing decline of iconic NFTs
Several iconic NFTs, once heralded as groundbreaking investments, have taken significant hits in their values. Let’s delve into the detailed stories of these NFTs, exploring what they are, why they declined in value, and what these cases signify for the NFT market.
In the swirling world of NFTs, the digital representations of unique assets, values can ascend to astronomical heights and plummet to surprising lows.
This exploration dives into this complex and fascinating arena, examining the highs and lows, the triumphs and pitfalls, and the lessons learned from the ever-evolving landscape of digital collectibles.
Jack Dorsey’s first tweet
In 2021, Twitter founder Jack Dorsey took an unusual step that captured global attention: He converted his very first tweet into an NFT and sold it for a staggering $2.9 million.
The tweet, a simple statement reading “just setting up my twttr,” represents a seminal moment in the social media era, akin to a digital Mona Lisa, according to the purchaser, Sina Estavi.
Estavi, the chief executive of Malaysia-based blockchain company Bridge Oracle, saw more than just a tweet; he perceived an artifact that would only grow in value as time went on. He likened his purchase to acquiring an iconic piece of art.
Disappointing auction
About a year after the purchase, Estavi decided to put the NFT up for auction, expecting it to fetch at least $50 million. The NFT was listed on Opensea, a prominent marketplace, and Estavi pledged to donate a significant portion of the proceeds to charity.
However, things didn’t go as planned. The auction closed with just a few offers, the highest being 0.09 ETH ($277), a far cry from the anticipated value. As of August 2023, the current price for this iconic digital asset hovers around $2,150.
Dorsey’s tweet NFT, though unique in content, is emblematic of the broader NFT market’s unpredictability. While some digital assets have maintained or even grown in value, others have seen dramatic declines. The case of this tweet illustrates that even highly publicized and symbolically significant NFTs are not immune to market dynamics.
Justin Bieber’s Bored Ape 3001
In January 2022, pop music sensation Justin Bieber made headlines with his purchase of Bored Ape Yacht Club’s NFT 3001.
This particular NFT cost the superstar 500 ETH ($1.29 million), marking a significant investment into the burgeoning world of digital art and collectibles.
Bored Ape Yacht Club, a collection of 10,000 unique, hand-drawn Bored Ape NFTs, was already a well-known entity within the crypto community. But Bieber’s acquisition brought even more attention to the project, and many saw it as a sign of the growing mainstream acceptance of NFTs.
A sharp decline: loss of over 95%
As of August 7, Bored Ape 3001’s value plummeted to a mere $52,510. This translates to a loss of more than 95 percent of its initial value. The sharp decline has been part of a wider issue facing Bored Ape Yacht Club and other similar NFT projects.
The news of the decline came just months after Bieber was among several celebrities named in a class action lawsuit against Yuga Labs Inc., the cryptocurrency startup behind Bored Ape Yacht Club. The lawsuit alleges that stars like Bieber and others promoted Bored Ape and other Yuga offerings via MoonPay, a financial tech company.
This complaint, which lists 37 defendants, including celebrities and executives from Yuga Labs and MoonPay, alleges that billions of dollars were generated through misleading endorsements without registering the securities with the SEC.
Bieber’s significant loss on his Bored Ape investment is emblematic of broader challenges in the NFT space. It raises questions about celebrity influence, responsible promotion, regulatory compliance, and market dynamics.
CryptoPunk 273
CryptoPunk 273 is a unique entry within the renowned CryptoPunks collection, consisting of 10,000 algorithmically generated characters. It became synonymous with the rise of NFTs in 2020-2022 and represents one of the first projects to make NFTs a mainstream concept.
But what makes CryptoPunk 273 stand out? The avatar NFT boasts rare traits such as big shades and a forward-facing cap, features found in less than 5% of all CryptoPunks collectibles.
In a shocking turn of events, CryptoPunk 273 was sold for just 55 ETH in May 2022, a staggering 80% cheaper than its previous purchase price of 265 ETH.
The story of CryptoPunk 273 shows how unpredictable NFTs can be. Just because something is rare doesn’t mean it will always be valuable. Market dynamics, investor sentiment, and broader economic factors all play a role in determining an asset’s worth.
Logan Paul: a $623,000 lesson in NFT economics
Logan Paul, a YouTuber whose antics and exploits have made headlines, turned his sights on the NFT market in 2022.
Eager to join the crypto bandwagon at a time when asset prices were sky-high, Paul spent a staggering $2.5 million on various NFTs.
The crown jewel of his digital art collection was an item from the Azuki collection, acquired for an eye-watering $623,000. Azuki, known for its unique and vibrant digital artwork, had become a symbol of luxury in the burgeoning NFT space.
The Azuki NFT’s dismal fate
The collapse in the Azuki NFT’s value was as dramatic as unexpected. Trading at a mere $10 when Paul revealed his loss, this staggering decline became a controversial topic among the crypto community.
Several factors contributed to this precipitous drop in value. The ongoing bear market undoubtedly played a role, deflating the prices of many digital assets.
But some pointed fingers at the nature of digital collectibles, calling them scams and advising people to steer clear.
Eminem and Ape Yacht Club
Eminem, the globally acclaimed rapper, leaped into the dynamic world of NFTs by buying Bored Ape Yacht Club’s NFT 9055.
This 15-time Grammy Award winner splashed 123.45 Ether, equivalent to $453,776.28, on the digital collectible in January 2022.
Eminem was evidently taken by the digital artwork, even displaying it as his Twitter bio picture. However, the investment landscape of NFTs can be as unpredictable as the rhythms of a rap battle.
A sharp decline: from stardom to disenchantment
Within the complex ecosystem of NFTs, even celebrities like Eminem aren’t immune to significant losses. BAYC’s NFT 9055’s last sale price has nosedived to $10,747 as of August 7, while its estimated fair price lingers around $79,000, according to Dapp Radar. This represents an astonishing depreciation from the initial purchase price.
Looking forward
As the world adjusts to the rise of digital collectibles, the examples in this piece offer caution and insight.
The NFT market, while young, shows promise. Yet, it’s not without risks. Buyers should recognize its unpredictable nature, tempering excitement with care.
The future might see the NFT market grow more stable. Remembering past lessons will be crucial for smart moves ahead.
