The current macroeconomic and geopolitical turmoil has crept up on once the hottest “non-fungible” future.
Coming off its best year yet in 2021, NFT values are plunging alongside crypto. The average sale price of an NFT is now below $2,000, down from over $6,800 in January, according to market tracker NonFungible. NFT marketplace volume fell to just over $4 billion in May, from $7.2 billion the month before. On June 18, Bitcoin fell below $20,000 for the first time since 2020. Ethereum and Solana, the tokens most commonly used with NFTs, have fallen about 71 percent and 79 percent this year, respectively.
Despite the plunge, interest remains high. At the fourth annual NFT.NYC conference, which took place last week in New York City, attracted more than 15,000 attendees. “At NFT.NYC, the circles I’m in aren’t talking about prices,” tweeted Chris Cantino, a partner at venture capital firm Color Capital. They “aren’t talking about leaving crypto. [They] aren’t talking about the next fad or flip. They’re talking about the future, and how they are going to build it.”
But it may make sense to consider tweaking your strategy during this crypto winter. “If you don’t have cash flow resources, and you’re [an entrepreneur that] wants to start an NFT business, it’s not a great time because it can be pretty cash-flow intensive, and right now it’s pretty hard to raise money if you start from zero,” Alex Micol, who is planning to launch a community-driven NFT Divergents Key, tells Inc. “But I think it’s a very good time to see the real projects survive and the fake ones get canceled because they simply cannot survive this crypto winter.”
For NFT or crypto creators, here are three ideas for building heat during the crypto winter:
1. Go Beyond the NFT
“My advice is to build a community and deliver beyond what you would normally do with an NFT,” says Micol. That way you can continue to build enthusiasm. The West Palm Beach, Florida’s multi-stage venture capital firm Velvet Sea Ventures, for example, is helping the art community SUPERF3ST to launch a music festival for the growing NFT and Crypto community during NFT.NYC this year. The goal is to build a successful NFT partnership to boost brand recognition across the titles, says Mike Lazerow, co-founder and managing partner of Velvet Sea Ventures.
2. Get Educated
Don’t waste your downtime. While you’re waiting for the NFT market to calm, “get lots of different perspectives,” NFT pioneer and entrepreneur Gary Vaynerchuk told Inc. last year. Vaynerchuk advises creators to use Twitter and Discord to bond with the community. “Join 20 to 50 Discords about different projects or genres. By the 50th hour of homework, you can start understanding where you want to navigate.” He adds: “Please don’t go hard into anything until then.”
3. Keep Your Community Close
Even when times are tight, you can keep your potential audience engaged with a customer loyalty program. If you operate a retailer, for instance, you can set up your program so every time a customer visits your business, they scan the loyalty NFT code to accrue loyalty points. At certain thresholds, you can push rewards, discounts, or blockchain tokens, which can be used in store. Consider this your reignition strategy; it’ll keep people tuned in while you bide your time until winter thaws.
Ultimately, Micol adds, important to look beyond 2022. “Once the market stabilizes or you have enough people supporting your NFT then that will be the time for a profitable launch. Until then stay patient and ride out the freeze.”