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In January, Canadian pop star Justin Bieber brought an NFT of a cartoon weeping monkey for nearly $2.34m.
Ten months later the image is estimated to be worth US$118,570 (NZ$214,600), an eye-watering loss of nearly US$1.2m.
A-list Celebrities such as Snoop Dog, Bieber, and Madonna have been some of the most vocal champions of NFT digital art. But some of them have lost a lot of money investing in the volatile assets.
A NFT (non-fungible token) is a digital product, usually an image, created with a special code which allows users to prove they own the item.
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Financial adviser Darcy Ungaro said NFTs were the type of asset that could easily be overhyped.
“Back in the old days it might be a fast car, a nice home and your own line of perfume. Now in the digital realm, NFTs provide the perfect opportunity for celebrities to show their financial prowess,” Ungaro said.
Investment hype from the everyday investors had further fanned the flames in the NFT market, and caused celebrities to pay exorbitant sums for NFTs that far exceeded the products worth, he said.
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Justin Bieber has lost over $1.2 million investing in a photo of a cartoon monkey. He is just one of many celebrities that have lost big on NFTs.
While investment hype among the wealthy was a tale as old as time, the NFT hype was different because many people misunderstood the technology and its underlying use, he said.
“There is an underlying innovation underneath NFTs around proving asset ownership in the digital world that we can’t afford to discount, even though there is a very thick crust of hype around it.”
Here are some of the worst losses of celebrity NFT purchases:
Justin Bieber
The Canadian pop star tops the list with an eye watering loss of US$1.2 for a Bored Ape Yaught Club NFT purchased for US$1.3m in January this year. As of Tuesday evening the NFT was worth US$93,951 according to data from NFT trading platform Opensea.
After he announced his purchase on Twitter, users mocked Bieber for overpaying for a fairly common NFT.
At the time of Bieber’s purchase the average price for a Bored Ape was US$270,908, which meant Bieber paid nearly four times the average price. He has not sold the NFT.
Logan Paul
The Youtube personality infamous for filming a dead body in a Japanese suicide forest, and has recently attempted a career re-vamp as a professional boxer, also lost a fair chunk of change in the NFT market.
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Logan Paul posted a $623,000 loss after investing in an NFT that saw its price tank.
Paul bought a digital picture of a helmet wearing space traveller for US$624,669. The NFT is now worth an estimated US$1300.
He has not sold the NFT, but was open to offers.
Madonna:
Pop star Madonna bought a Bored Ape Yaught Club NFT for US$466,461 in March. The image, of a monkey wearing a leather hat and necklace had dropped to an estimated US$131,984.
As well as owning several NFTs, Madonna has also created her own line of NFTs in collaboration with the digital artist Beeple. Her NFTs, titled Mother of Creation, show a computer generated naked image of herself giving birth to a tree.
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Madonna is a prolific owner of NFT images, and has even collaborated on her own NFT project with digital artist Beeple.
Snoop Dog:
The American rapper holds the title of most expensive celebrity NFT purchase after he spent US$7.09m on an NFT called Right-click and Save as Guy.
But another NFT owned by the rapper, titled Crypto Punk was bought for US$1.1m and is now worth an estimated $688,251, according to Opensea
Steve Aoki:
The American DJ and music producer bought a drawing of an alien for US$862,056 in January.
The artwork, named Doodle #2238 is now valued at an estimated value of US$39,137 by Opensea.
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