Written by Hazel J. Greene, Senior Analyst

In March 2021, Twitter co-founder Jack Dorsey made headlines when he auctioned off his first tweet as a non-fungible token (NFT) for a staggering $2.9 million. This unique digital asset, representing a digital certificate of ownership, was acquired by Sina Estavi, the CEO of Malaysia-based cryptocurrency company Bridge Oracle. Estavi had ambitious plans to sell the NFT for a remarkable $48 million, with half of the proceeds earmarked for charitable donations.

However, what appeared to be a promising venture has taken an unexpected turn. Recent data from OpenSea, one of the world’s largest NFT marketplaces, reveals that the highest bid for the NFT stands at a mere $3.82 as of July 20. In fact, the highest bid received in the recent past amounted to just $47.78, indicating a drastic decline in value.

Titled the “Jack Dorsey’s Tweet-Turned-NFT Plunges By 99%,” this article delves into the factors contributing to the substantial drop in value and sheds light on the highly volatile nature of the NFT market. It is clear that the general sentiment among traders and collectors suggests the NFT is worth significantly less than its initial purchase price.

One key aspect to consider is the perceived simplicity of the asset itself. Dorsey’s first tweet, transformed into an NFT, simply reads, “just setting up my twttr.” Critics argue that the value of an Ethereum-based screenshot of a tweet may not resonate as strongly with collectors. Moreover, as the tweet remains under Dorsey’s ownership, the NFT holder technically does not possess the actual tweet but rather a digital certificate of ownership minted on the Ethereum blockchain.

The plummeting bids also reflect the overall trend in the NFT market, which has experienced high levels of volatility. Similar to cryptocurrencies, NFTs form a relatively new asset class influenced by speculative market forces. Consequently, prices can fluctuate dramatically, with some NFTs reaching exorbitant values within short periods.

The recent decline in the NFT market can be attributed to the broader bearish trend in cryptocurrency prices observed in 2022. As a result, NFT trading activity has contracted significantly, leading to substantial drops in floor prices for prominent collections such as CryptoPunks and Bored Ape Yacht Club (BAYC).

The floor price represents the lowest value at which an NFT item can be sold in the listed marketplace. For example, the floor price for BAYC has crashed by over 90% from its 2021 peak of $600,000, highlighting the challenging market conditions.

While the sharp drop in value of Jack Dorsey’s Tweet NFT may be disappointing for Estavi and the charitable intentions, it serves as a stark reminder of the unpredictable nature of the NFT market. At the intersection of technology, art, and speculation, NFTs remain an intriguing and evolving asset class that demands comprehensive understanding and analysis.

As the NFT market continues to evolve, it is crucial for traders, collectors, and enthusiasts to exercise caution and conduct thorough research to make informed decisions. While the allure of owning unique digital assets can be enticing, the value and longevity of such investments remain subject to shifting market dynamics.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.