The People Who Lost Serious Cash on NFTs

If you had to pinpoint the moment the NFT bubble was at its most grotesquely swollen, then it’s surely when Paris Hilton went on The Tonight Show Starring Jimmy Fallon in Jan. 2022. It was a fever dream of an interview, in which Fallon and Hilton had a stilted and bewildering chat about their recent investment in Bored Ape Yacht Club NFT artworks. “I wanted something that reminds me of me,” said Hilton, as Fallon held up a picture of an ape wearing a hat and sunglasses, and the audience applauded.

Flash forward a year, and the vast majority of NFTs are now virtually worthless, according to a report by dappGambl. An NFT of the first ever tweet – from former Twitter CEO Jack Dorsey that read “just setting up my twittr” – that sold for £2.3 million in 2021, is now worth around £1,200. In August, it was reported that a group of collectors who had invested in Bored Ape NFTs were filing a lawsuit against the numerous celebrities (including Fallon, Hilton, Justin Bieber and the auction house Sotheby’s) who they believe had falsely marketed the artworks and intentionally inflated their price.

But for most investors, high profile lawsuits won’t be an option. Instead, they are left to ruminate on their losses and move on with their lives. So who are the people left bearing the consequences of this collapse? And what are they going to do with their ruined investments? We interviewed five NFT investors – whose losses range from a few thousand quid to $5 million – about what went wrong, what they’re going to do next, and how they feel about the future of NFTs.

Kyle Heise, 32, San Francisco – down $2,050

VICE: How do you feel about the losses?
Heise: Regarding the overall mentality, I feel fine. I never invested too much. But I do know several people who have been driven to very critical health states. I’ve seen dudes heavily invested in NFTs that have tanked, getting jobs delivering pizzas because they stretched themselves too thin. I’ve heard about heart attacks and suicide attempts – seriously awful and dire situations.

What is going on in the NFT space now?
First, there’s a really negative association with these communities. They’re full of grifters and arrogant people who made quick money and somehow think that getting rich off some random JPEG purchase makes them better people. But I’ve also seen NFTs do some really great things: Support struggling artists, give people jobs, and even bring attention to the world plastic crisis at a UN Summit in Kenya. NFTs are truly going to positively change many industries.

Secondly, the truth is many of these NFT projects are owned by just a few people and are passed around between those same folks. This leads to the infighting and flurry of hysteria in these small social groups. Hype and FUD (Fear, Uncertainty, Doubt) multiply like wildfire. This leads to some crazy situations.

Thorne Melcher, 35, Atlanta – down $5,000

VICE: How much money did you lose?
Melcher: The value of my collection is down almost $5,000 from its peak. I was never a big spender chasing things that seemed overpriced to me, like Bored Apes. I paid about three grand to get two crypto coven [witch-themed NFTs] that could now fetch a few hundred bucks at most. I still like them, but that crash is indicative of how much the NFT market cratered.

Is there a future for NFTs?
Absolutely! Just not in the way people were expecting a couple of years ago. Anti-NFT folks have often derisively compared them to Beanie Babies or tulips, but both of these are still popular, well-selling goods. There just has to be more focus on the typical buyer being someone who gets gratification out of the NFT itself; because of what it unlocks, the art itself or significance of owning it. That isn’t going to command Bored Ape-level prices, and that’s okay.

I’m sure we will see more super expensive NFTs in the future, but as long as that is what defines the space, it’ll hold back their appreciation and adoption by wider audiences. It takes a certain type of person to constantly chase what are essentially gambling wins, but most people do enjoy collecting things that, in the words of Marie Kondo, “spark joy”.

Joseph Skewes, 39 – down $50,000

VICE: How much did you lose on NFTs?
Skewes: The value of the NFTs I held peaked around Sept. 2021. I recall calculating their worth at one point as well north of $50,000 based on market prices. I still hold the vast majority of them – I couldn’t sell most even if I wanted to; I would be down 95-99 percent from peak prices. I’m probably out of pocket $2,000 from that period, but from the peak, the loss is upwards of $50,000.

How did you feel about the losses?
There were some pangs of regret that I didn’t sell at the top. I could have sold, bought back my favourite art pieces, and had more of my mortgage paid off. I don’t think about it too much today; I just enjoy the NFT collection I have, and continue to buy more from time to time. I’m currently building a startup with several other cofounders that aims to help people showcase their favourite NFT collectibles and art.

Robin (name changed for privacy reasons), 32, Florida – down $300,000-$400,000

VICE: How much did you spend on NFTs?
Robin: I only had $10,000 in crypto when NFTs caught my eye in 2020. During the 2021-2022 bull run, I went all-in and luckily turned $10,000 into $800,000. My biggest win (90 percent of my profits) was buying Bored Ape before they got popular.

How much money did you lose?
It was all downhill after April 2022, because both NFTs and crypto were in free fall. I luckily sold all my Bored Ape assets at the top for $800,000. After the 2022 crash, I got back into NFTs and memecoins and have been pretty unsuccessful since. I’ve lost about $300,000-400,000 trying to trade these assets.

Describe how you felt about those losses then, and now?
I felt invincible making $800,000, so I was more willing to spend a lot. But after losing 50 percent of my profits, it was upsetting. So I’ve gone back to my original strategy, which is to sit on my hands and wait for the next crypto bull run. I try to resist most NFT and memecoin temptations, even though I want to keep buying.

Sergei Sergienko, 41, Sydney – down $4.995 million

VICE: How much did you spend on NFTs and how much were they worth at the height of their value?
Sergienko: Personally, I’ve spent close to $500,000 on NFTs and they reached a peak value of at least $5 million. I “lost” at least $4.995 million, as the current value of those NFTs is close to $5,000.

How did you feel?
To tell you the truth, I’m well accustomed to losing crazy sums of money. I’ve been in crypto for a while. You always get these crazy gains followed by substantial losses. I’ve seen it all before, and the NFT hype was not my first rodeo. I can appreciate how upset an average person would be, though. First time I lost everything, I was devastated and found some sort of sanity in alcohol. Then I channeled myself into work and new opportunities, of which one was crypto.

Will you keep participating in buying and selling NFTs?
I’ll definitely participate in the NFT economy in whatever form it takes. It’s usually very advantageous to be ahead of everyone else – the early bird gets the worm, so to speak. NFTs are just at the beginning of their journey. I’m sure plenty more opportunities lie ahead. We are just getting started.

nichet