Justin Bieber is a celebrity victim of the recent NFT price plunge. The singer paid a whopping US$1.29 million for one of his NFTs in January. It is now ‘worth’ 95% less than that.
The NFT is part of the ultra-famous, ultra-expensive collection called the Bored Ape Yacht Club, or BAYC for short.
Hype around NFT collections like BAYC earlier this year boosted prices to insane levels. For example, BAYC #8817, sold for a mind-blowing figure of US$3.4 million.
Why on earth are celebs paying so much for NFTs?
NFT stands for “non-fungible token.” They were first invented in 2015, and were originally called a “Vatom” — short for “virtual atom.” (Yes, we should definitely go back to this name.)
Much like cryptocurrencies, NFTs can be bought and sold like other valuables. They are a digital token, and each one is totally unique. They come with a digital certificate of ownership.
If something is fungible on the other hand, it can be directly traded with the same asset. One Bitcoin, for example, is the same as another Bitcoin, and therefore fungible. NFTs however, are non-fungible. They are one-of-a-kind.
Real-world gemstones like the Hope Diamond and masterpieces like Van Gogh’s Starry Night are also non-fungible — there is nothing like them and they are irreplaceable. NFTs are just the digital version of this uniqueness.
And that is exactly why celebrities like them. Celebs are all about the rare art and finer things. Comedian Steve Martin has a Picasso, so does Elton John. Celebrities Brad Pitt and Angelina Jolie own a Banksy each. But for the younger generation of celebs, they like NFTs. They can use them as profile pics on their socials, and they can even project an NFT onto a wall with new NFT frames.
Some hotels, like the Hilton, are now even offering rooms with NFT frames in them, and guests can choose which NFTs they want them to display. Many hotels are also displaying NFT art in their public areas.
What is BAYC?
Probably the most famous NFT collection in the world, owning a Bored Ape Yacht Club NFT is now like a new digital country club membership.
Starting out as a simple NFT launch by Yuga Labs, these days, it’s a billion-dollar ecosystem. BAYC NFTs have appeared everywhere from TV shows to licensed merchandise.
But not everyone is a fan. Some say NFTs like BAYC are a burden on the blockchain industry, which could be used for more productive things. But, we humans have loved art since the dawn of our monkey-like species, and NFT art is just the latest iteration of this. The fact that Apes have taken the NFT iron throne is telling. We are just a type of ape ourselves, but dammit, we like a bit more culture than what’s in our yogurt.
Bieber gets rekt
Bieber’s Bored Ape #3001 is down 95% on his NFT investment price.
And not only did Bieber lose money on his first Ape purchase. Bieber bought a second Ape, which he showcased on his Instagram account to his 265 million followers.
The second time around, Bieber didn’t drop a massive bomb of money. This BAYC NFT was more moderately priced at 166 ETH which was around US$470,000 at the time.
Bieber seems quite caught by the NFT world. He also has shown off NFTs from collections like Doodles to his followers.
Justin Bieber and losses on NFTs
The losses Bieber has made on his NFTs may be more sharp than usual compared to other celebrities – many have said that he overpaid for his original Ape.
Seeing as it didn’t have rare traits or other unique features, he could have paid much less for it.
When he bought it, he posted some of his song lyrics with it.
However, this may not be the “lonely” situation it seems. If Bieber is just a collector and wanted the Ape because he liked it, then it doesn’t matter what the current market price is. NFTs can be valued at whatever the higher bidder or seller demands of it. And of course, the NFT market may shoot back to life again one day in the future.
The NFTs that have been previously owned by celebrities will certainly be worth more than those that haven’t. So you better beleib it, Bieber may still be sitting on a fortune in NFTs.
Why have prices fallen?
Last week, one of the biggest crypto exchanges, FTX collapsed in an embarrassing heap of mismanagement and fraud. The implosion has started to bring down other exchanges as the contagion continues and the event spooks the entire crypto market.
The horrifying happenings of last week have also had a knock-on effect on the NFT market. This is because some NFT holders trusted FTX to hold their non-fungible tokens on their behalf. And now, with the platform collapsed, they can’t access their NFTs.
For example, NFT tickets for the Coachella Festival this year (which came with extra benefits like backstage access) are now stuck on the exchange, unable to be retrieved.
This has led to a further spiralling of NFT prices, which were already on their way down as inflation across the world has set in. Many commentators have said, however, that this is just all part of normal market cycles, and things will be on the up again in the near future.
Want to know more about NFTs?
NFTs are not just simply art. NFTs can be used in music, movies, in logistics, in proving items are authentic, like with diamonds or even wine. Get dosed up on this innovative new tech here. Learn what’s the dealio with NFT art here. And then, after all that fine reading, you might be compelled to make your own NFT. Learn how here.