A $10 million loss. Just gone. And that’s what just happened to the poor sap that spent $16 million on a CryptoPunk and just days ago sold it for $6 million. An NFT – a Non-Fungible Token. A digital certificate of ownership for a specific object or work of art, recorded on a blockchain.
I know, I know. I know many of you are saying, “Good! They deserved it! Betting on pictures!” Some of you may be experiencing a twinge of schadenfreude. Hold on before you get too excited, because here’s what this $10 million bonfire actually is. It’s more than a return on investment for a billionaire. It’s a striking reminder of the balancing act individual liberty and the greater good, uh, of everybody else.
Freedom To Invest, At What Cost?
I think we live in a world that preaches financial independence, for lack of a better word. Invest your money! Take control of your future! Diversify! Yes, you definitely should, but in a grounded way. NFTs were the latest technology to conjure this mirage, an alluring digital gold rush with the promise that anyone could make it rich. Sure, a few people did. Early adopters made bank. For every story that ends in fortune, millions of regular folks have sunk their savings into crypto. Now those assets are worth less than the gas fees they paid to mint them.
We fight for the freedom to make our own reproductive choices, the freedom to spend our dollars however we want to. I agree with that in principle. Here's the rub: that freedom comes with responsibility. On top of that, the CryptoPunk craze skyrocketed attention and activity through the roof with hype and excitement. It was powered by FOMO, people investing with a risky lack of knowledge. Everyone then wanted to get rich quick and jumped on the bandwagon. Their mismanagement came to pass in their inability to value – or lack thereof – these digital assets.
This is not about a CryptoPunk only. Currently, the most five expensive NFTs of all time are still CryptoPunk collectibles. Even with the speculative downturn, collectors are still unwilling to part with these collectibles. Their limited nature and distinctive digital qualities are part of what keeps the collector community engaged. CryptoPunk collectibles, previously bought for over $1 million USD, are now listed for sale for as little as $65,000 USD.
Speculation's Ripples Impact Everyone
Think about it. $16 million dollars. Imagine what that money could have accomplished, rather than languishing in a CryptoPunk wallet. It could have funded a school. We could have used it to bring clean water to an entire community. It could have supported a small business. It could have created jobs.
Now, before I get too far into this argument, let me be clear. When hundreds of billions of dollars rush into fundamentally worthless, speculative assets, the fallout can be disastrous. These assets have no intrinsic value, and their risks are often too much to bear. Resources are diverted from productive uses. As we all know, bubbles inflate and then burst, often leaving a trail of financial wreckage behind.
And that destruction doesn’t only target the wealthy elite. It affects everyone. When markets crash, the ripple effects they create hurt public pension funds, government worker’s retirement accounts, and overall the health and viability of the economy itself. And if we’re honest with ourselves, emerging economies—especially those in Africa—have a greater risk of falling victim to these trends. We understand the appeal of get-rich-quick schemes, the lure of poverty alleviation through virtual currencies. Yet we’re reminded of the heartbreaking impact when those promises are found to be hollow.
Ethical Investing & Society's Needs
Is it ethical to promote or participate in speculative investments that one knows will be bad for others? This is a difficult question. Personal financial responsibility only goes so far. Creators and promoters of these assets should be honest about the risks involved. They have an obligation and a duty to make sure everybody knows.
It’s time we began anticipating the ethical outcomes of our investment decisions. Are we just pursuing easy money, or are we making bets that will build long-term value for the country? Are we building towards a more equitable and sustainable future, or are we just stoking the next shiny new speculative bubble?
CryptoPunk #3100, the third-highest NFT ever sold, was resold for 4,000 Ethereum (ETH), representing a $10 million USD loss compared to its initial purchase price. Consider the schools this money could have built, the hospitals it could have paid for, the small businesses it could have started.
Yes, financial freedom is important. It’s certainly not the only thing that counts. Society should be our top priority. Let’s direct our dollars to efforts that truly promote value and avoid making bets on speculative bubbles that end up hurting all of us.
So, what's the answer? I'm not advocating for heavy-handed government regulation. I challenge each of you to practice financial literacy. Let’s invest in ways that reflect our values and educate ourselves about the moral costs of our investments. We need to educate ourselves, to understand the risks, and to make informed decisions that benefit not just ourselves, but the broader community.
It's a wake-up call. It’s an important lesson that reminds us all, freedom without accountability is a volatile mix. And it’s a lesson that our whole country has to learn. I’m a citizen of Accra. Double the Trouble We need to be more discerning when it comes to believing things!
