M○C△ Confessional: Can Bankruptcy Be Our Salvation?
In so many words...
It is my distinct pleasure to welcome you to what is proving to be a fairly bipolar edition of:
Bipolar because, while I won’t ignore the fact that it seemed for a few days there like the entire global economy was about to crash-and-burn, I can’t shake the feeling that though such an economic downturn would be a bloodbath in many regards for crypto art, it might be the only way we can save our souls.
Dramatic, I know.
Anyways, let’s go back a bit.
As I’m sure many of you are aware, last week ended in a dicey spot for global finance. My best understanding of this multi-pronged situation is that a perfect storm of negativistic conditions amassed all at once, including but not limited to:
A so-called “Carry trade” gone awry. Essentially, The Bank of Japan unexpectedly raised its federal interest rates and thereby triggered a cascading sell-off of worldwide assets. You can read more about this here.
The escalation of US military activity in the Middle East, with Iran threatening direct attacks on Israel, the United States sending 4,000 troops and an aircraft carrier to the area, and the resultant implication of other sovereign nations around the world.
A lower-than-expected job’s report in the United States triggered what is called the “Sahm Rule.” Named after the “economist Claudia Sahm, the rule says if the average unemployment rate over three months is half a percentage point higher than the lowest level over the past 12 months then the country is at the beginning of a recession. In this case, the US unemployment rate rose in July, so the three-month average was 4.1%. That compares to the lowest level over the last year which was 3.5%,” as per the BBC.
I’m writing this part of the column on Tuesday afternoon. Today, many markets appear to recovered from what were unprecedentedly bad days on Friday. Japan’s largest stock market, the Nikkei 225, fell 12.5% on Friday, then surged 10% on Monday. ETH’s price fell from ~$2700 to $2200 in a matter of minutes last week, but had regained 50% of fall at the time of this writing, mirroring Bitcoin, which had a slightly-less dramatic fall and a more substantial recovery. The Dow Jones index fell nearly 2,000 points at market open today, but gained back about a third of its losses at the time of this writing.
Why go into such detail on the economic side of things? Because the global happenings which triggered this sell-off are not —it seems to me— one-time events. They are sticky, they have grave implications, and they are likely not done with us yet. Even if markets recover substantially by the time you read this, that does not mean fears of a wider financial free-fall are unfounded. Warren Buffett recently sold something like $80-Billion in Apple Stock, and to my knowledge, he hasn’t bought anything back. When someone of Buffet’s stature battens down in this manner against storms on the horizon, I consider it a portent.
Anyways, let’s move away from the macro and towards the micro-est of the micro: crypto art.
As it pertains to crypto art, well, listen: I write this column a few times a month, I podcast about this space almost every week, I speak to guests from all over the ecosystem, and over the course of the past many weeks, one thing became clear:
Crypto art has stagnated.
Stagnation is a bad state for an art movement. Crypto art is especially momentum based, as artists see new technology being used by other artists and incorporate it into their practice. As platforms seek to outdo each other: better aesthetics, better tools, better discoverability, greater incentives. As curators learn from each other. As collectors attempt to keep up with each other, or fill in the blanks their compatriots left open.
Stagnation, however, generates its own momentum, one of inaction and angst. How many platforms and projects —Async, KnownOrigin, JPG, PolygonalMind come quickly to mind— have closed due to the community’s inattention and inaction? Many. How many bold new projects are minted each week? Less and less all the time, it seems, few appearing interested in exposing months of hard work to a coy market. How many exhibitions are being assembled, curations pored over, events organized? Besides that Bitcoin Conference which happened in Nashville the other week (something I initially, if reductively, referred to as a “hellhole-nightmare-threadguy-republican-circle-jerk,” but which has, admittedly, for many years also brought together many artists I deeply admire: RareScrilla, Coldie, Josie Bellini, FractalEncrypt, the list can go on and on) basically none. Colborn and I spent an entire podcast episode lamenting the lack of Metaverse activity of late, but it’s not just the Metaverse. We have long been mired in a motivational morass.
Only in a world of wildly spiked crypto prices, massive acceptance of NFTs, and institutionalized incentive structures in crypto art will that change.
I am not expecting such a future anytime soon.
The more likely future is a bleaker one, economically speaking. A global recession —a possible outcome of the aforementioned economic negativity— is much different than the crypto bear markets of our recent past. Crypto crashed in 2018, but the global economy did not. The global economy crashed in 2020, but crypto did not. In 2024, staring down the barrel of a recession, I think it’s fair to ask “What happens to crypto art if a worst-case scenario plays out?”
In the worst-case scenario, crypto crashes extra-proportionally to the rest of the global markets. Crypto prices fall, NFTs are entirely forgotten, and crypto art sales aren’t just rare, aren’t just relegated to the top 1% of artists, they’re almost completely absent. In this world, should art sell at all, it’ll be at pearl-clutchingly low prices. The expectation that artists be properly compensated for their art becomes a hope, and then it becomes a relic. The influencers will once again leave, the blockchains will go silent, our remaining platforms will strip to their skeletons and subsequently shutter. No more marketplaces, no more discoverability, no more anything. Just a bunch of artists collected together on social media, hanging onto the dream of an artistic revolution, with nothing to fight over, nothing to lust after, no expectations, no entitlements.
In some ways, that sounds absolutely terrible. But in other ways…doesn’t it sound…somewhat…attractive?
Confession time: Somewhat counterintuitively, I think that a truly catastrophic economic environment might be just what crypto art needs to find itself again. And I’m not sure it can do so otherwise.
I'm not being defeatist, I’m just repeating the sentiments of those around me when I say that crypto art is fundamentally broken. Its entire incentive structure is wrong. Online influence and/or groveling at the lap of high-profile collectors, these are the only proven ways to a sustainable career. The quality of one’s work has long since ceased to matter economically. Name recognition is everything. Did you show work at a biennale? Did you sell something at Christie’s? Did someone with a Cryptopunk avatar enlist you into their meme project? If not, you’re probably not able to make ends meet with your art, or even treat it as a worthwhile second income stream. Crypto art has been relegated to a mere Trad.-Art facsimile, with all the same star systems, all the same lusting after fame, all the same 1%-ism, all the same kingmakers.
Moreover, the last few months have proven that crypto art either cannot or will not step-in to protect its treasured institutions. Async.Art tried their best when they released Forever Supper last year, but we did not bite. PolygonalMind dropped XCOPY-derivative Metaverse avatars, for god’s sake, and even that failed to attract attention. There are no sustainable crypto art business models. I will not be surprised when SuperRare closes, when Zora cleans dry the last of its coffers, when Foundation’s “Rodeo” fails to make a dent (though I do not wish such a fate on any of them).
This is inevitable in a stagnant ecosystem. An economic downturn only speeds up the proceedings. It assassinates platforms, it sends the nonbelievers running for the hills, it has the influencers committing seppuku.
Which leaves crypto art looking a lot more like it did in the beginning.
Lest we forget, the crypto art of yore —that golden age of crypto art so many are inclined to sing songs about— consisted of a small and penniless contingent. XCOPY editions going for a few dollars; Moxarra selling a piece to Artnome for less than the price of a cup of coffee; TheDruid dropping $1 bids on every freshly-minted SuperRare artwork, and finding some of them accepted. Nobody expected to make money in early crypto art because there was no money. I have talked to countless OG artists, collectors, writers, and curators of note over my years here, and they all say the same exact thing: Crypto art died when the money started flowing. Crypto art has proven unable to survive being rich.
So let’s say we take away all financial vehicles. Crypto art reverts to its initial state: a necessarily tight-knit and passion-oriented group playing with new technologies, collecting their friends’ art for peanuts, and prioritizing —because why wouldn’t they?— their passions over their wallets.
If there’s no money to be made, art becomes free. Artists have no reason not to create what fulfills them. If there’s no money to spend, collecting art becomes accessible to all, regardless of budget or curatorial strategy or market conditions. Thus, collectors have no reason to collect anything other than what they love. I’d argue the legitimacy of these assertions are already proven by the rise of platforms like ZeroOne, the expansion of free-mint-forward blockchains like Base and Zora, and the continued devotion of many artists to Tezos.
(I don’t know if there will be much writing or much curation, but you know what, there isn’t very much of it now, and most of it today is produced by passionate, curious, interested parties who will be here regardless of market conditions.)
Point being, crypto art might very well crumble, but it’s been crumbling for some time now, buckling atop faulty foundations. Let it crumble if it must. Let us be free from drooling, dead-eyed influencers saying “This is how we build,” as if that statement means anything anymore. Crypto art can survive anything, and that’s because it is more an ethos than a thing, its survival something philosophical instead of financial, because the thing we’ve called “crypto art” has for years been a pale shadow of what it claims to be. Survival can be beautiful. It can be poignant, and it can be explosive.
And I think it will be.
At the core of crypto art is a nucleus of misfit artists and thinkers who truly do care about one another. That doesn’t rely on market conditions. In fact, market conditions tend to conceal it. I don’t want to be so trite as to say “The real crypto art was the friends we made along the way,” but perhaps it’s more accurate to say, “The real crypto art was the friends who were here the whole time.”
Let the market burn this place to the ground. Let the auction houses slink away in fear, and let their artists be unchained. Let the platforms disintegrate, but let their founders and their engineers remain alongside us. Let the movement once again predicate itself on passion instead of profit. We cry to the heavens, so many of us, praying for such things, but they seem only achievable in the wake of a great conflagration.
I do not fear the fire. Let it come.
-Your friendly neighborhood art writer,
Max