The NFT craze resulted in sales skyrocketing early this year. From January through May, the industry had witnessed massive sales of NFTs across categories, including music. In fact, the sales peaked on May 3, when $102 million worth of NFTs were sold in a single day.
However, in the last week of May, the sales plummeted by around 90%. For an entire week, the industry witnessed sales only to the tune of $20 million. While collectibles like CryptoPunks and CryptoKitties remained steady, crypto art took the biggest hit.
Similarly, Music NFTs also witnessed a dramatic drop in sales. According to the International Music Summit (IMS) Business Report 2021 published this week, music NFT sales peaked in March, with the sales bringing in $26.7 million. The sales, however, saw a steady decline in the next months, going down by nearly 50% in April. It further fell as low as $1.4 million in May—a near 95% drop.
Electronic music artists drive sales
One of the biggest findings of the IMS Report is that a whopping 76% of all music NFTs in the past year were issued by electronic artists. The immense enthusiasm of these artists drove sales worth $50.2 million.
This comes as no surprise as the industry saw artists like Steve Aoki, Don Diablo, and 3LAU hopping on the NFT bandwagon. Jenny DAU recently paid Steve Aoki and 3LAU $1million to create an NFT track. Dutch DJ Diablo, meanwhile, sold his first NFT ‘Infinite Future’ for $927,500 during Sotheby’s recent ‘Natively Digital’ sale.
“After experiments with NFTs up to and including 2020, electronic artists finally catapulted them to the forefront of the music industry’s attention in early 2021,” the report noted. NFTs opened up a new avenue for artists to engage with their fans during the pandemic.
It, however, added, “For all the fuss that’s been made over NFTs, we are only in the earliest of early days of seeing their potential.”
“This didn’t exist eight months ago. We need to push as many use-cases as we can. To learn. We don’t even know what all the uses are yet,” said Dean Wilson, manager of Canadian electronic music producer deadmau5.
While Hip-Hop and R&B drove NFT sales in April, it has since dipped drastically.
What the future holds
The recent dip in music NFT sales could be a marker of the ‘cooling-off period’. Every time a new commodity explodes in the market, the hype-driven price swings and losses inevitably slows down, and treads a path of steady growth. This doesn’t mean that the NFT craze is over.
In fact, despite the lull in the market, many new artists are launching their NFTs, and fresh NFT platforms are also popping up. For instance, Triptcip, a new NFT platform for electronic music, is all set to launch this month. Similarly, Omni mega app, which aims to revolutionize the music industry through NFTs, is expected to launch later this year.
All these are clear indications that the market for music NFTs are very much alive. How it seeps across genres, however, remains to be seen.