“The crypto friends left. When the music stopped, they ran for the hills.” Art advisor Wendy in the majestic atmosphere of the Grand Palais during the Art Basel Paris trade show in October・Mr. Goldsmith said so. As Bitcoin reaches new heights and Ether approaches its 2021 peak, will the art world’s previous courtship of the crypto crowd begin to pay off?
Early signs would suggest so. Cryptocurrencies began their recent rally in the weeks following US President Donald Trump’s re-election, and are now strongly favoring decentralized digital assets. Recently, Justin Sun, founder of the cryptocurrency platform Tron, sold Maurizio Cattelan’s The Comedian (2019) – literally a banana duct-taped to a wall – for 6.2 million yen at a Sotheby’s auction in New York. It made headlines when it sold for a dollar. He paid for it in cryptocurrency.
Next month, the auction house plans to accept Ether or Bitcoin at its first sale in Saudi Arabia, marking the first time an entire live auction of a physical work has been opened to cryptocurrencies. Sotheby’s said the decision, in a region with high levels of digital art and cryptocurrency-related activity, will provide the auction house with an additional pool of buyers. The 119 diverse works include Western and Saudi modern and contemporary art, luxury goods, a jersey worn by soccer player Cristiano Ronaldo, and generative “AI data paintings” by leading artist Refik Anadolu. Masu. His expansive “Mechanical Hallucinations — Space | Chapter II: Mars” (2021) uses data from space telescopes to create surreal, organic landscapes and cost between $800,000 and $1.2 million. It is estimated that $.
Before the Covid-19 pandemic, attracting the tech crowd to the art market was proving difficult. It’s the rise of non-fungible tokens (NFTs), a unique digital asset that connects art to blockchain and lends itself to geometric abstractions and cartoonish caricatures, and the newly minted virtual currency It has brought some millionaires and billionaires.
Cristiano Ronaldo’s 2024 UEFA European Championship quarter-final jersey on sale at Sotheby’s “Origins” auction in Saudi Arabia © Sotheby’s
Christie’s and Sotheby’s began accepting cryptocurrencies for some physical works of art in 2021, following Christie’s watershed sale of Beeple’s Everyday: The First 5000 Days. It’s an NFT made up of 5,000 digital images stitched together with many satirical elements (including a giant naked Trump sitting astride the Capitol). The buyer was Vignesh Sundaresan, aka Metakovan, founder of crypto investment fund Metapurse, who paid a staggering $69 million.
Since then, the physical works that have qualified have tended toward technical hobbies, including a 1984 bright yellow painting by Keith Haring depicting a crowd engrossed in a computer. It sold for £4.3 million at Christie’s, although the auction house has not confirmed whether any offers have been made. Payment in cryptocurrencies has been adopted. Christie’s will accept alternative currencies provided the seller is comfortable receiving the virtual currency, but bidding will be in local fiat currencies as well as auction house fees. Sotheby’s also does not hold any virtual currency itself. Currently, Sotheby’s Metaverse and Christie’s 3.0, each with their own dedicated NFT and digital art platforms, allow buyers and sellers to use cryptocurrencies.
For the art market, the hope was that NFTs and their associated alternative currencies would provide an entry point for new buyers into the realm of generally expensive art. Mr. Sun himself made this journey, spending more than $6.2 million in the process. In early 2021, he purchased a screensaver-like “cube” NFT piece by digital artist Murat Pak. The pieces were sold through Sotheby’s on the specialized Nifty Gateway platform and were priced at $1,500 each. A few months later, Sun purchased KAWS’ popular 2001 painting “Untitled (Kimpsons),” according to his social media posts. The painting depicts the artist’s cartoon character sealed with an X in his eye. It comes in a blister package and costs HK$2.5 million (approximately $300,000). Just five months later, Sun entered the heavyweight modern art scene, purchasing Alberto Giacometti’s “Le Nez,” a 1965 sculpture of a long carved nose inside a cage, for $78 million.
Currently, not everyone in the art market wants the crypto team back. Goldsmith’s assessment of the atmosphere at the Paris Expo was that it was characterized by a stable and thoughtful atmosphere, free from the chaos of crypto speculators. The profile of these previous buyers (mainly young men) also did not fit well into a market suffering from a lack of diversity. There’s also the timeless truth that new entrants into a conservative and insular art market are often viewed with suspicion.
“Comedian” by Maurizio Cattelan (2019) © Maurizio Cattelan
Such concerns are a convenient development in a difficult market, but many extend beyond the nature of crypto buyers. The allure of art in a clandestine market that can turn volatile paper profits into portable tangible assets has already made NFTs attractive to money launderers as a potential new playground. .
Angell Xi, a partner at Chinese law firm Jingtian & Gongcheng, said in the 2024 Art Basel and UBS Art Market Report that cryptocurrencies are banned in China “based on numerous anti-money laundering cases.” writes. In the EU, updated anti-money laundering and anti-terrorist financing rules have been tightened for all companies offering services related to crypto assets, including a ban on anonymous payments.
The auction house has a compliance team and approaches cryptocurrencies with relative caution. Outside of dedicated NFT platforms, only a small number of works were auctioned until Sotheby’s Saudi sale on February 8, while Christie’s said its NFT sales to date include Beeple and its fees. The total amount is estimated to be 150 million dollars.
Although NFTs have lost most of their heat, they may gradually return to popularity. According to ArtTactic’s Global Art Market Outlook released this week, 12% of experts are positive about NFTs’ expected performance this year, although this is still well below the previous high of 73% in 2023. , which is double the percentage from last year.
Meanwhile, Christie’s says the average age of NFT buyers is 42 years old, compared to 54 years old for all sales. This is in line with the company’s commitment to positioning its business for younger generations, and is in line with the strategy incoming chief executive Bonnie Brennan highlighted last week, saying her plan is to “focus on innovation and “while maintaining tradition.” . . Attract new audiences, geographies, and technologies. ”
The truth is that the art market, which has been in a clear downturn for the past two years, needs all the help it can get. According to Art Tactic, total auction sales at Sotheby’s, Christie’s and Phillips fell by 19% in 2023, but by 26% in 2024. In situations like this, every little thing helps. So when the crypto music starts moving again, auction houses are ready to join in the dance.
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