The cryptocurrency entrepreneur who bought an non-fungible token (NFT) of Twitter founder Jack Dorsey’s first tweet was hoping to sell it for $48 million, more than 16 times the $2.9 million he paid for it.
But after an auction that lasted a week, the highest bid offered was a mere $280.
Sina Estavi, founder of two Malaysia-based cryptocurrency companies, bought the NFT from Dorsey last March. The Twitter founder claimed he would use the proceeds of his sale towards COVID-19 relief efforts in Africa.
At the time, Estavi said his purchase price was a bargain. “Years later,” he predicted “people will realize the true value of this tweet, like the Mona Lisa painting.”
One year later, that prediction is not panning out. On April 6, Estavi listed the token on NFT marketplace OpenSea for $48 million. On Twitter, he promised to donate 50% of the proceeds to GiveDirectly, a charity that allows donors to give money directly to people living in poverty.
Investor interest was tepid. When the auction “closed” on Wednesday, Coindesk reported that only seven bids had been entered for the token, with the highest coming in at $280.
More bids have come in since then. Yet the highest offer—$6,200 as of publication time—is still significantly below what Estavi paid for the NFT, let alone what he hoped to earn through the auction.
Estavi is not obliged to sell the NFT. “The deadline I set was over, but if I get a good offer, I might accept it, I might never sell it,” Estavi told CoinDesk.
NFTs are digital assets whose ownership is encoded on a blockchain. In theory, owning an NFT means that the holder gets to own and control the digital asset.
Yet it is unclear what Estavi actually owns as a result of purchasing the NFT of Dorsey’s tweet. Dorsey’s post remains on Twitter, and the Twitter founder could have deleted it—or minted more tokens linked to it—as he liked. Users could also easily screenshot a copy of Dorsey’s tweet for themselves.
The NFT market grew significantly in 2021. NFT sales hit $17.7 billion last year, up from just $82 million in 2020, according to a report from market tracker Nonfungible. The average price of an NFT also increased from $49.18 in 2020 to $807.52 in 2021.
However, the NFT market has entered a slump this year. By early March, daily sales were down 83% since the end of January, while the average price of an NFT fell from a high of $6,200 to just under $2,000 over the same period, according to market tracker Nonfungible.
NFTs backed by celebrities have struggled on the secondary market. One NFT backed by the musician Grimes plunged 84% in value between its first and second sales, from $7,500 to $1,200.
The drop in value of Estavi’s NFT is significantly greater: if he accepts the highest bid of $6,200 (as of publication time), he’d only get 0.2% of what he paid for it—and even less if you subtract the half he promised to charity.
According to Coindesk, Estavi was arrested in Iran on charges of “disrupting the economic system” in May 2021, two months after buying the NFT of Dorsey’s tweet. He spent nine months in custody before being released without explanation. Estavi’s company Cryptoland—one of Iran’s biggest cryptocurrency exchanges—closed down after the arrest. Investors also ditched the currency that backed Estavi’s other project, blockchain company Bridge Oracle, causing the token’s value to sink to near-worthless levels. Estavi is now trying to find ways to compensate his investors, says Coindesk.