Jack Dorsey sold a nonfungible token of his first tweet for roughly $2.9 million, WSJ reports.
Why It Matters: Long live the digital collectibles boom. Dorsey’s tweet is the latest token to “haul in more than $1 million amid a flurry of interest from buyers.” The overall NFT market exploded last year to $338 million from around $41 million in 2018, per NonFungible.com and L’Atelier.
- Mike Winkelmann, a self-taught artist who goes by the name Beeple, sold a digital image for $69.3 million, “making him the third-most-expensive living artist after Jeff Koons and David Hockney.”
- It was conducted by Valuables, an NFT marketplace specializing in buying and selling tweets.
- The tweet was won by Malaysia-based blockchain company Bridge Oracle CEO Sina Estavi. He also pursued an NFT tweet from Elon Musk but the latter then changed his mind.
- Cryptocurrency investor Justin Sun, who notably paid nearly $5 million at a charity auction to have lunch with Warren Buffett, was the second-highest bidder.
- The tweet will continue to live on Twitter. The NFT version is “signed using cryptography and includes the tweet’s metadata such as when the tweet was posted.”
The Good News: All of the money is going to charity. Dorsey posted tweets showing “auction proceeds being converted into bitcoin and sent to the nonprofit group GiveDirectly’s Africa Response project to offer emergency Covid-19 cash relief for families in Kenya, Rwanda, Liberia and Malawi.”
I am still wary about jumping into the NFT space. Unlike investing in other assets, buying NFTs are akin to buying art or music without established royalty streams. In that sense, the value of art is only what another art-enthusiast is willing to pay for it at that moment and doesn’t have the same “intrinsic value” as a financial asset, utility asset, or commodity asset.
No doubt that lots of wealth can be made and stored in art, but I’m not sure I have the “eye” to understand the scarcity dynamics of each piece. Additionally, there is only one owner per NFT, so it would be hard for us to build wealth together in this way.