NFT values are falling alongside crypto after having its greatest year to date in 2021. According to market watcher NonFungible, the average sale price of an NFT is currently less than $2,000, down from nearly $6,800 in January.
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
Build a community and go above and beyond what you would typically do with an NFT, advises Micol. In this manner, you can maintain your enthusiasm. For instance, the multi-stage venture capital company Velvet Sea Ventures in West Palm Beach, Florida is assisting the artist collective SUPERF3ST in launching a music event this year during NFT.NYC for the expanding NFT and Crypto communities. According to Mike Lazerow, co-founder and managing partner of Velvet Sea Ventures, the objective is to establish a fruitful NFT collaboration to increase brand recognition throughout the industry.
2. Get Educated
Spend your downtime wisely. NFT pioneer and businessman Gary Vaynerchuk advised Inc. last year to “get plenty of different opinions” while waiting for the NFT market to settle. Vaynerchuk suggests that creators connect with the community on Twitter and Discord. He continues, “Please don’t go deep into anything until then. Join 20 to 50 Discords discussing different projects or genres. By the 50th hour of homework, you can start realizing where you want to navigate.
3. Keep Your Community Close
Even when times are tight, you can keep your potential audience engaged with a customer loyalty program.
For example, if you run a store, you may set up your program so that each time a customer comes in, they scan the NFT loyalty code to get loyalty points. You can push prizes, discounts, or blockchain tokens that can be spent in stores at specific levels. Think of this as your reinvigoration plan; it will keep viewers interested while you wait for the winter to end.
In the end, Micol continues, it’s critical to think past 2022. “The right time to launch your NFT will come once the market has stabilized or you have enough supporters. Till then, be patient and endure the cold.”