Sep 23, 2022 - Technology

Crypto downturn makes NFT artists get creative

Illustration of a grid of coins in a Pop Art style.

Illustration: Shoshana Gordon/Axios

NFT artists who can no longer count on a frothy crypto market to buoy sales aren't giving up, but they're having to lower their financial expectations and get more creative.

Why it matters: Artists have struggled to pay the bills since time eternal, and when NFT mania struck last year, many hoped the tech would provide a lasting solution.

Catch up quick: NFTs are digital records of ownership existing on a blockchain — commonly, the Ethereum blockchain. Artists can "mint" their work as an NFT, then sell the digital ownership rights to collectors.

State of play: The value of most NFTs is closely tied to the overall crypto market, which has been in full retreat this year.

  • A single ether coin, for example, is now worth about $1,300, down from a peak of nearly $5,000 in November 2021.
  • The number of daily transactions on OpenSea, one popular NFT platform, is down to around 60,000, compared to a high of nearly 225,000 this past April.

Between the lines: The NFT market, experts say, was flooded with content of varying quality, creating a glut that forced prices down. There were also more people creating NFTs than buying them.

Yes, but: Even though the hype has dwindled, there's still an active community of people buying and selling all sorts of NFTs, says Lynnette Blanche, co-founder of Desire Path, a digital community for NFT-curious photographers.

  • "There's still a lot of activity that's happening with smaller artists and communities that, if anything, I feel like is consistent with the amount of selling and creating that was happening at the beginning," Blanche told Axios
  • "I just think there isn't as much of this hype that was really prominent on Twitter in the early days, with quarantine and COVID when people were home and had less things to do."

For Noah Kalina, a photographer in New York's Catskills who was relatively early to the NFT world, the phenomenon has shifted from something that could pay the bills to another revenue stream alongside his other work.

  • "In many ways, the NFT market has just become part of life, like anything else," Kalina told Axios.

Commercial and fine art photographer Pete Halvorsen has been using the bear market to prepare for what many in the NFT world hope will be an eventual rebound.

  • "I've used this opportunity to start to become more multi-discipline with taking my images, and now I'm working on how else I can present the images — whether it's utilizing some [generative art] aspects to display them to even incorporating some AI into my images," he says, referencing increasingly popular artificial intelligence-based art-making tools.

The big picture: All of those in the NFT world who spoke to Axios for this story agreed that despite the financial pains, the community was better off now that those who were only in it for a quick cash grab have departed.

  • "It's gotten tighter because misery loves company, and people love to be like, 'Hey, man, I'm down bad — let's talk about this,'" says Halvorsen.

Plus, as San Francisco Chronicle photojournalist Scott Strazzante told Axios, artists can still find some financial success selling NFTs — provided they're already big names or get invited to sell their work along with other creators in high-profile collections.

Be smart: Lots of artists criticized NFTs because of cryptocurrencies' energy consumption.

  • However, Ethereum recently underwent "the merge," a behind-the-scenes structural reboot that dramatically reduced its power use — a change that could draw in more creators if there's another bull market.

What's next: Artists in the NFT space are holding out hope that the glory days will return. But many are realistic about that possibility while celebrating the still-lively community.

  • "There was always, in the back of my head, 'Well, I'm going to flip these and make some money,' and 'This is going to be something — I can quit my job eventually,'" says Strazzante of his NFT collection. "Those dreams are definitely over by now."
  • "But the NFT space in general is just as fantastic," he adds. "There's still a community of people who get together on Twitter Spaces and talk about photography, and I see the work of so many photographers I never knew existed."
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