Pop Goes the NFT Bubble? Jack Dorsey Sold His First Tweet for $2.9M. The Buyer Was Just Offered $528

A year ago, crypto entrepreneur Sina Estavi bought an NFT of Twitter founder and former CEO Jack Dorsey’s first tweet for $2.9 million.

That tweet read: “just setting up my twttr,” and was first published on March 21, 2006.

Last week Estavi put it up for sale on OpenSea, the largest marketplace for nonfungible tokens (NFTs), which can hold media such as art, music, video or even documents, making them unchangeable and unforgeable.

just setting up my twttr

— jack⚡️ (@jack) March 21, 2006

Bidding closed Wednesday (April 13). The top bid? 0.17 ETH, or about $528.

That’s 0.018%.

Which raises a number of questions, but most notably, was this a fluke, or is the air finally escaping from an NFT bubble that has been expanding far past what is reasonable ever since Mike “Beeple” Winkelmann sold a collage of his digital artworks called “Everydays: The First 5,000 Days” at Christie’s auction house for $69.3 million on Feb. 16, 2021?

Not much was known about NFTs outside of the core crypto community at that time. As of the beginning of that year, there had been 5.2 million NFT sales totaling $162 million over the past 4½ years. By Feb. 15, there had been about 5.3 million sales, with about $247 million spent according to NonFungible.

Fourteen months later, the number is 41 million NFTs sold, with $25.8 billion spent. Which a whole lot of inflation.

See also: What Are NFTs and Why Are They Crypto’s Newest ‘Next Big Thing?’

But if you look at a graph, there’s an enormous spike between June and October last year, with a few much smaller ones since.

So, is it a bubble bursting, an overheated market deflating or just a pullback?

Pop, hiss, or fluke?

A few days ago, Modesta Masoit, director of finance and analytics of decentralized application (DApp) research firm DappRadar, which tracks NFTs, told Reuters it was the latter.

“Everybody was expecting that there was going to be a consolidation period,” she said. “It’s not going away, it’s just consolidating.”

Even NFT aficionados don’t all agree. Colborn Bell, founder and curator of the Museum of Crypto Art, told Fortune in February that “I am prepared, I think, for a cataclysmic market crash.”

A former investment banker who is still a passionate NFT art believer, Bell nonetheless sees a market struggling with too many sellers and not enough buyers.

“The barrier to entry for artists is much lower than it is for collectors,” Bell said. “In my mind, that formula does not work.”

Is it Jack?

There are a few special circumstances about Dorsey’s first tweet, which the current CEO of Block, the payments firm behind Cash App, first sold at auction with proceeds going to charity.

For one thing, it didn’t get the kind of publicity a sale at Christie’s or Sotheby’s would get.

For a another, there’s the question of the contents of the NFT itself. As you’ll see above, anyone can view it, and the NFT brings no ownership rights to anything but the NFT itself.

See more: What do You Get When You Buy an NFT? Less Than You Think

And it’s not art or an avatar or a song; it’s memorabilia. Which isn’t a barrier on its own: Julian Lennon just sold notes his father wrote about the arrangement of “Hey Jude” for $76,000. But then, there’s not much Beatles memorabilia you can’t sell, virtual or physical.

That said, Dorsey’s memorabilia that should be doing well. Having departed Twitter, Dorsey has refocused his attention on Block, which is championing Bitcoin as a payments currency. And it’s doing well. Ark Invest’s Cathie Wood recently sold off her PayPal holdings to focus on Cash App, citing its “singular focus” on Bitcoin.

Read also: Ark Invest’s Cathie Wood Bets Cash App Will Win Bitcoin Payments

A Bitcoin “maximalist” who sees it as the only payments cryptocurrency, Dorsey is becoming a higher and higher profile name in the crypto and especially Bitcoin business — in a profile  Wednesday (April 13), Bloomberg proclaimed him “Bitcoin’s Spiritual Leader.”

Then its current owner, Estavi, has his own problems. The Malaysia-based Iranian crypto entrepreneur was arrested in Iran on a charge of “disrupting the economic system” last May, leading to the collapse of his CryptoLand exchange and the price of his Bridge Oracle token tanking, crypto industry news source CoinDesk reported. Since released, he’s working on rebuilding the oracle project on a different blockchain, trying to appease earlier buyers.

Read more: Smart Contracts Get Weather-Savvy With AccuWeather on the Blockchain

Still and all, the NFT sales trend has never gotten close to what it was last summer. And while the blockchain metaverses will require a whole lot of NFTs — everything in there is built from them — the brands rushing in are looking for marketing gold, not skyrocketing prices.

See more: PYMNTS Metaverse Series: The Brands Are There. Will Eyeballs Follow?

Which maybe doesn’t bode well for the buyer of CryptoPunk #7756, who paid $3.24 million for it this afternoon …