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To a casual observer, all of the news stories about crypto and NFTs recently would lead you to think that the entire space is dead. The naysayers of crypto and blockchain are already doing their victory laps and tossing about their “I told you so’s”. The true believers are trying to convince everyone that this is just a natural bear market and “you’d be stupid not to get in while prices are cheaper!”
So, let’s take a little dive.
Crypto, the coins you use to buy and sell most major NFTs, is down across the board.▼ Article continues below ▼
Ethereum is down a full 33% from around $3800 = 1 ETH January to today where it is hovering around $1800 = 1 ETH. Same with Bitcoin, down from around $50,000 =1 BTC to today at around $23,000 = 1 BTC. Solana was supposed be the low-gas-fee crypto and chain to buy and sell, and it has been cannibalized from about $180 = 1 SOL to today around $40 = 1 SOL. And we dare not speak about the LUNA disaster.
But the stock market isn’t much better. The NASDAQ is down about 24% from 16000 in January to 12000. The DOW has fared better, only down about 10% from 36,500 in January to around 32,000. Economists are worried about inflation and there are stories of shortages everywhere. Yet, employment is up, and some sectors are fully recovered from the worst of the pandemic.
That’s the money side, what about NFTs specifically? Well, we’re in a huge lull. The Wall Street Journal shared this data point: In September 2021, 225,000 NFTs sold every single day, and today that number is closer to 19,000. OpenSea, which is arguably the largest NFT marketplace, has seen daily app downloads plummet 94% from a spike that reached 180,000/day in January to around 20,000 today. Sales volume on OpenSea totaled $2.64 billion in the past April, while unique traders on the platform fell by 23%. A competing marketplace, LooksRare, saw their users sell $2.32 billion in NFTs in April, a reduction of more than 80% from their height.
But keep this in mind, American business runs on hyper-growth, not value. So, today’s numbers are all in comparison to the numbers last year (or the first month of 2022) when NFTs and crypto were all the rage, when the SuperBowl and major TV shows were slamming star-studded crypto commercials down everyone’s throat. Of course, the market is going to go down. When you look at it that way, sure, you can massage the numbers so it looks bleak as hell.
But is it? Look at that OpenSea number. If NFTs are dead, someone forgot to tell those 20,000 new people who are downloading the app each day. That’s still a monster number.
Even though the majority of Music NFTs are on OpenSea, what about the music-specific NFT platforms? For all of the openness of the “blockchain” and Web3, it’s hard to get data on specific platforms. But we can discern whether or not the musicians/artists are still trying, and we can see whether or not they are selling through and if fans are interacting.
Royal.io (https://royal.io) which focuses on partial ownership shares by NFTs, has sold through the last three drops: NAS, Diplo, and Big Boi. And the Chainsmokers are about to do a new drop. Vault.fan (https://vault.fan), which focuses on “keys” to Vaults as NFTs, has at least 12 new offerings, certainly not sold out, but there is some action there.
Sound.xyz (https://sound.xyz) has 12 offerings on their “latest” page with most of the artists having raised over 2 ETH each, which is close to $5,000 USD. On Audius.co (https://audius.co) which is also a streaming ecosystem, we can look at the trending plays to estimate action. The #1 track right now has over 10k streams in the last 5 days, the rest of the TOP 10 chart rounds at about 5k pays per track. The Audius coin, AUDIO, is down about 50% from about $.86 = 1 AUDIO to $.46 = 1 AUDIO. But the trading volume in the last 24 hours was up 31% at $23,340.
What all of these numbers do not show is the number of Music NFT projects being developed right now which are not live yet. I personally am involved in two of them and know at least another ten big ones coming soon. After the Ape JPEGS and the VeeFriends madness, many developers tried to jump in and make a quick buck by selling crappy art, or in the music space, old tracks or crappy videos. Everyone realized what the truth was all along: NFTs do not magically sell, you still have to build community (fans) and value BEFORE you launch. This means most new launches will take a longer time to go to market as they build their Discord communities and roadmaps, as well as stuff more utility to please a buying public.
It’s going to be harder for independent musicians to get traction in a down market. You’re going to have to hold the hands of your fans and convince them why they should go through the hassle of wallets and converting fiat to coins. You’re going to have to be an advocate and really assuage the concerns of your fans, because they see all these stories about being ripped off or scammed (we call those rug pulls). You’re going to have to provide a lot more utility and value, meaning more exclusive items, more physical items or experiences to convince your fans this is worth their time.
Last word of advice — do you have time to dedicate to this? It’s a very big undertaking, and it may all be worth it in the next few years as platforms shift and more consumers get digital wallets. But you also might be wasting time which you could be spending on making better music and growing as an artist, just to chase this shiny new object. I’m all for Music NFTs as a means to serve and delight the fans you have and gain some new ones, as long as you are already serving them. Are you already releasing new music, creating new merch options, offering physical like vinyl, regularly? Are you already providing entertaining content on TikTok, IG, or YouTube? If you are already doing these things, then you are in a good position to focus on Music NFTs.
It’s an exciting time. But, do not let this Music NFT madness derail you from what matters most, the actual music.
–Michael St. James is the founder and creative director of St. James Media, specializing in music licensing, publishing, production and artist development.