(Bloomberg) -- From a local pizzeria that recently began accepting Dogecoin to mounting commissions for additions to a sprawling mural of images based on nonfungible tokens, this year’s rebound in the cryptocurrency market is creating buzz in the Williamsburg section of Brooklyn.
The neighborhood, which is also home to a bathhouse that uses heat from crypto-mining rigs to warm its pools and a gym where the price of Bitcoin is regularly hand-written on the wall, has morphed into somewhat of a brick-and-mortar proxy for the mood of a market that’s as famous for its busts as its booms.
After an epic bust last year, digital-asset prices are rising again — and so are the spirits of the Williamsburg artists, techies and small-business owners who have a vested interest in the market.
“I’m just trying to get ready for the next bull season,” said Erdem Tezeren, a barista at the Turkish coffee shop Lion’s Milk who co-founded Caffeinated Lions, a membership program based on nonfungible tokens, the digital assets most commonly associated with artwork and collectibles that live on crypto blockchains.
As the crypto industry slowly but surely extends a comeback from last year’s collapse amid optimism that US regulators will finally approve exchange-traded funds that directly hold Bitcoin, Tezeren and many others in Williamsburg are especially focused on the prospects for the NFT market.
Between January 2022 and July 2023, monthly trading volume for NFTs plummeted 81%, according to data from DappRadar. Things looked better in October as monthly volumes increased 32% from September, the first growth this year. Still, monthly flows of more than $405 million are a tiny fraction of the industry’s highs, which last year reached a peak of $17 billion, per DappRadar. Yet the recent uptick is enough to re-energize both collectors and artists in the neighborhood.
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Tezeren said over the last few months, the Lion’s Milk team has been working on launching NFT merchandise to promote both the membership program and the coffee shop itself, which is already known for the NFT gallery displayed on its walls. Lion’s Milk, located at the corner of North 6th and Roebling Streets, started selling Ape Water from Web3 company Ape Beverages in October and tentatively plans to offer more Bored Ape Yacht Club IP products soon.
Izer Saporta, the shop’s co-founder, began integrating NFTs into the café in October 2021. Since then, the shop has hosted events for Bored Ape and Moonbirds NFT holders, as well as Wagumi DAO members. At the end of September, Lion’s Milk held an Apecoin Creators & Bored IP meetup, drawing in around 40 influencers and enthusiasts. Saporta described the event as a “full house,” in keeping with the growing crowds for NFT events held at Lion’s Milk over the last few months.
Williamsburg’s most public display of digital-art tokens can be found a few blocks down Roebling Street: a giant mural of NFTs which runs the length of a three-story apartment building. The paintings of more than 130 NFT images are the work of graffiti artist Lorenzo Masnah, who was commissioned for his first piece two years ago.
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The wall became popular after both Web3 educator Mec Zilla and the Bored Ape Yacht Club shared photos and videos of it online. Soon after, Masnah said he received requests for additions from the likes of Matt Hall and John Watkinson, the creators of NFT collection Crypto Punks, and Nick Johnson, a lead developer of Ethereum Name Service (ENS), a domain-naming system on the Ethereum blockchain.
Masnah visited Williamsburg again last month to paint new images on the wall to commemorate its two-year anniversary. So far, he’s received commissions for over a dozen new additions — a number that’s steadily increasing and has prompted him to make plans to return to Williamsburg in the spring.
“I’ve been seeing more interest in the wall as the market goes up,” Masnah said. “Every couple days now someone asks me about commissions.”
Over the last two months, Masnah and the team at Lion’s Milk have been looking into purchasing property on Grand Avenue across from the wall that would act as a gathering space for the NFT community — filled with digital and physical art, merchandise, and Web3 gaming.
Read More: Understanding NFTs and the ‘Bored Ape’ Boom and Bust: QuickTake
Businesses that have been around since before NFTs were a thing are also joining in on the crypto hype. Williamsburg Pizza, founded in 2012, began accepting Dogecoin at its Williamsburg and East Village locations just a few weeks ago. The move came a month after its decision to launch a blockchain-based loyalty program featuring an NFT membership card, which currently has more than 277 active users.
Aaron McCann, the pizza joint’s co-founder, describes himself as a “blockchain enthusiast.” Over the last two years, Williamsburg Pizza has sponsored events for crypto companies like Chainlink, DotConnector and Dart Studios.
“We provide pizza in some of those circles just because we like to learn more about the space,” McCann said.
Yet despite what appears to be a pre-bull run for the NFT market, not everyone sees the momentum being sustained. Sara Gherghelas, a researcher at DappRadar, attributes the inflated demand for NFTs to the increase in Ether token prices and the holiday season.
“With Christmas coming soon, NFTs are up,” Gherghelas said. “Retail buyers might want to buy them as a present. NFTs are usually seen as a luxury item when you have money to spend.”
Gherghelas also pointed to Binance Holdings Ltd. and its former Chief Executive Officer Changpeng Zhao’s guilty pleas to anti-money laundering and US sanctions violations, in addition to recent layoffs at NFT companies OpenSea and Yuga Labs, as evidence of the woes that continue to plague the Web3 industry.
Read More: Binance Pleads Guilty, Loses CZ, Pays Fines to End Legal Woes
Bull run or not, crypto aficionados are making their presence known in Williamsburg, whether its the price of Bitcoin being written on the wall of Chalk Gyms, or the GHOST Williamsburg private-training business using a Web3-friendly xyz website domain.
Even a bathhouse in Williamsburg touches the crypto world. Jason Goodman co-founded Bathhouse in 2019 and two years later, as a “fun side project,” he decided to power the pools using Bitcoin mining rigs. The spa repurposes the excess heat produced from Bitcoin mining, which uses powerful computers that consume significant amounts of electricity to earn revenue by validating Bitcoin transactions.
Bathhouse earns just under one full Bitcoin per year, or about $39,000 at current prices, with nine mining rigs that run 24/7, according to Goodman. By the end of the year, the team plans to open a new location in Manhattan’s Flatiron District that will also be heated by Bitcoin mining. Although Goodman said he didn’t start mining Bitcoin to get rich or attract crypto enthusiasts, he assumed that Williamsburg residents would be interested.
“There’s probably a demographic overlap between people who live in Williamsburg — those who are well-educated, and people in the creative industries that are free thinkers,” Goodman said. “It makes sense that people here are interested in crypto.”
“Silicon Valley got a little crowded,” said Daniel Lynch, a former Brooklyn resident and head of MetaMask institutional partnerships. “Williamsburg has that synthesis of, ‘I want to build an application, and I want to be stable, but I also don’t want to necessarily have to wear a suit every day.’”
With Bitcoin trading at an almost 19-month high and budding signs of an NFT revival, hope is growing in Williamsburg and beyond that those suits will remain hanging in the closets.
©2023 Bloomberg L.P.