I have expressed my puzzlement with the idea of buying so-called NFTs (Non-Fungible Tokens) and have made several posts about the whole concept. And yet people are spending huge amounts of money on them. NFTs seem like collectibles except that while most collectibles are tangible objects with limited numbers of them, NFTs are digital constructs that can be easily reproduced by pretty much anyone. The value of an NFT seemed (to me at least) far more speculative than other forms of collectibles and thus liable to wild price fluctuations.
So it did not surprise me to read about someone who bought an NFT for $2.9 million in March 2021 but when he tried to resell it for $48 million yesterday, the highest offer he got was $6,800.
Crypto entrepreneur Sina Estavi made headlines in March 2021 when he paid $2.9m for an NFT of Twitter boss Jack Dorsey’s first tweet. But his efforts to resell it have run aground, with a top bid of just $6,800 as of Thursday.
The initial purchase was at the time among the most expensive sales of a non-fungible token, or NFT, and came amid a flurry of interest in the niche crypto assets.
Estavi put the tweet up for resale on the popular NFT marketplace OpenSea last week, initially asking for $48m.
That price tag was removed after offers in the first week were in the low hundreds of dollars. As of Thursday, the highest bid was 2.2 of the cryptocurrency ether – equivalent to about $6,800.
“My offer to sell was high and not everyone could afford it,” Estavi told Reuters via Twitter direct message, adding that he was no longer sure if he would sell the NFT.
Not everyone could afford to shell out $48 million for an NFT of a tweet? Well, duh!
There are obviously some people who can afford it, since this entire NFT phenomenon seems to be driven by people who have way more money than they know what to do with and can afford to indulge in this kind of fad. Furthermore, the fact that he was trying to get 16 times the amount he paid for it in just one year might have struck even such people as just a bit too greedy.
Estavi is trying to put a good face on this debacle.
“It’s important to me who wants to buy it, I will not sell this NFT to anyone because I do not think everyone deserves this NFT,” Estavi said.
Really? You think that NFT’s are like puppies who should only be handed over to a loving home?
What this illustrates is that people do not really know how to assign a value to ‘ownership’ of something that is freely available and reproducible.
A fool and his money are soon parted. A rich fool even quicker apparently.
“It’s important to me who wants to buy it, I will not sell this NFT to anyone because I do not think everyone deserves this NFT,” Estavi said.
That’s the sort of thing people say about a collectable, but not an investment, which an NFT most certainly is. I can see somebody only wanting a baseball fan to buy their ball signed by Babe Ruth. Somebody who would spend good money on a baseball probably cares a lot about baseball. But, most people who buy collectables will tell you they’re terrible investments and you should only buy things that you would enjoy even if it had no resale value. But, I can’t hold a NFT or put it on a shelf to look at and impress other people that come to my home or office. All it has is monetary value and once it loses that, it doesn’t even have sentimental value. It’s a Beanie Baby without the Beanie Baby.
In a market, why can’t I move the price pressure downward by low-balling? If I offer $0.10 for the NFT (still overvalued) it ought to move the demand down. I’m aware that market price is set based on the last sale, not the current offer, but that’s suspiciously convenient.
In the mid-20th century, the great leveller of wealth was WWII, without which the gap between the richest and poorest would have been greater.
The NFT craze is a more humane way of burning up resources.
After a mistake of that scale, made so publicly, I think we can stop calling this jackass an “entrepreneur.”
Oh, and the money he paid for that NFTulip wasn’t “burned up,” it just ended up in someone else’s pockets.