The investment case for music NFTs
Will music NFTs increase in value?
Gm music fans,
Last week I posted a poll on Twitter…
“For anyone that *doesn’t* own a music NFT yet… why not?”
Here was the biggest answer:
According to the results, most people think there isn’t a good investment case for music NFTs.
I understand why.
Web3 music is not like PFP trading. There’s no quick flips and alpha groups. There’s no ponzinomic tokens.
But…
Music is art…. and art can rise in value….
The XCOPY story
Back in 2018, cryptoartist XCOPY sold this piece of art for $139 on Super Rare.
Three years later it sold for $6 million.
The Autoglyphs story
In 2019, a generative collection called Autoglyphs sold for a $35 donation each.
Today the cheapest Autoglyph is 249 ETH ($390k).
The Crypto Punks story
Crypto Punks were free to mint.
Today the cheapest Punk is 67 ETH ($105k).
At the time these artworks were minted, no-one could possibly have predicted the insane ROI.
It was just a small group of people passionate about digital art experimenting with blockchain technology.
Music NFTs are in the 2019 era of crypto art
Generally I think music NFTs are in the same place as cryptoart in 2018 / 2019.
It’s small group of passionate artists and collectors experimenting with ideas, looking for new ways to monetize. Eventually I believe it will hit a critical mass and the valuations will follow.
It won’t play out exactly the same as cryptoart because music is fundamentally different to art. It’s consumed differently and resonates with a different audience.
But I believe the general trajectory will be similar.
The potential path for *some* music NFTs
This doesn’t mean that all music NFTs will go up in value, but a small group of music NFTs that define the culture probably will.
The rise of cryptoart proved one thing:
Culturally-significant digital artifacts have enormous value.
It won’t happen overnight. It takes time for that culture to grow and become a movement. But when that happens, there will be a shift in how people value music NFTs and the artists pioneering the space.
To be clear…
I primarily buy music NFTs because the music resonates with me and I believe in the artist.
In the words of one of my favorite art collectors, “I never expect anything I collect to accrue value but I always have the conviction that it could.”
And ultimately I don’t know if we’ll ever reach the insane returns of XCOPY or Autoglyphs again. That zero-to-one moment for onchain culture is impossible to recreate.
But I do have very strong conviction that more value will accrue around the artists in the Web3 music space right now.
There are other ways to think about ROI, too…
1. Investing in Web3 music as a whole
Most people can’t invest privately in Web3 music companies.
And buying ‘ETH’ is too broad for their conviction in Web3 music specifically.
Collecting music NFTs across different platforms offers some kind exposure to the entire movement of Web3 music.
2. Investing in relationships
Collecting music NFTs has connected me to so many incredible people.
Artists, founders, investors and friends.
Collecting NFTs can unlock opportunities and friendships you never thought were possible.
3. Investing in something… good
Investing directly in musicians just feels more rewarding and meaningful than investing elsewhere.
You can literally see the funds directly helping new artists develop their career. That lights a fire that can’t be replaced.
Disclosures matter
For all the reasons in this article, I always try to add disclosures and we have a fully transparent disclaimer page here.
And none of this is investment advice, it is just my opinion!
Thanks for reading!
If you found this useful, please share with your group chats and let me know what you think on Twitter!
What I take away from this is that we're still talking to the wrong people. Until we shift from an era where there are more collectors of music NFTs for the connection they offer to artists than investors in music NFTs for the returns they promise, this market will not reach escape velocity.