This Is How NFTs Are Revolutionising The Art World
Even as the global NFT market now equals the entire art market in value, we're only seeing the beginning of the sea of changes in which art is created, sold and enjoyed
In March 2021, Christie’s sold Beeple’s Everydays -The First 5000 Days for US$69.3 million. Overnight, art NFTs became a sensation and Beeple became the third-most valuable living artist after David Hockney and Jeff Koons. In 2021, Christie's auctioned over US$150 million worth of art NFTs, and the global NFT market—including art and non-art—ballooned to US$40 billion, equivalent in value to the entire global art market.
NFTs are revolutionising how digital art is sold
Empowered by blockchain technology, NFTs are revolutionising the ways digital assets can be transacted. A digital asset, usually in the form of a simple file, can be easily copied an infinite number of times. However, when minted on the blockchain as a non-fungible token, it becomes possible, with a very high degree of reliability, to establish uniqueness, trace provenance and current ownership, or even to capture ongoing royalties for the original artist.
Decades after digital art emerged, its access to commercial markets is today transformed by revolutionary technological advancements, namely blockchain technology. Art NFTs join a larger world of NFTs, which is comprised of anything from sports memorabilia, to all digital assets supporting tokenised ownership. The enthusiasm seen in the past months for Web3 and all the emerging ecosystems related to it, likely signals just the beginning of a new revolution going far beyond the sensational sale of Beeple’s collage only a year ago.
Thanks to more ubiquitous commercialisation, we see established digital artists gain recognition, and we also witness more established and traditional artists, who, despite being used to oil and canvases, embrace digital art and all the possibilities that this medium offers. Utilising digital media, they find new avenues to express new artistic concepts. One example is the multidisciplinary artist Urs Fischer—known for his subversive collages, drawings, and large installations—who now regularly “drops” new art NFTs. We will continue to see some fascinating dialogue between fine art NFTs and crypto art NFTs.
Art NFTs will continue to open new horizons and experiences for collectors. Crypto art is adding a strong dimension of community. As the digital art world knows, BAYC (the acronym for Bored Ape Yacht Club) developed rapidly beyond mere NFT ownership: BAYC NFT owners not only control the commercial rights for their avatars, but are also given access to “The Bathroom”, a members-only graffiti board where they can express their creativity, and receive free drops only available to owners, that can be combined with their existing NFTs to create additional, unique NFTs of value. The permutations of smart contracts are virtually unlimited.
Going further, following the emergence of metaverses like Decentraland or the Sandbox, we are also likely to see the commercial art world join other brands and industries in these new virtual worlds: collectors or museums will be able to open their own galleries, share, and sell their own collections of digital art.
Art NFTs have witnessed a spectacular rise in popularity and price in just a few months. Digital artists are suddenly enjoying unprecedented levels of attention from art collectors, triggering speculation that a bubble may be building up.
Like many other breakthrough technologies, the democratisation of art NFTs might experience some temporary downward momentum, as illustrated by the Gartner curve. I was born early enough to be in my college years to fully witness the boom, then bust, of many internet companies in the year 2000. Similarly, it is hard to believe that prices for art NFTs will not go through some adjustment at a certain point. Today, however, we also know that most of the largest companies in the world were also born during that very first internet boom.
The revolution of NFTs is here to stay and it will create durable value in the long run.
Collect art NFTs the way you would a “regular” piece of art
For anyone hoping to embark on the collecting journey, many valuable pointers for older, traditional methods of collecting are universal, and also apply to art NFT collection. Good art is desirable, while bad art isn’t. While rarity, provenance, aesthetic appeal, technique, and concept, are all important drivers of value for more traditional art, they are also drivers to keep in mind when collecting NFTs. Established collectors are well aware that art is about much more than making money: it’s about the expression of your own collecting interest, being a custodian, and treasuring objects that trigger a deep and very personal emotional connection.
Auction houses will continue to assist collectors in research, authenticating artwork, documenting provenance, and advice on pricing. They will continue to play a vital role as tastemakers, as we have experienced in 2021. Digital art has joined, with a resounding bang, the other eighty categories of collectibles represented at Christie's, and is already a regular feature of prominent, evening sale auctions.
Art NFTs are not just a fad; they contribute to a fascinating continuation of 21st-century art. The journey has only just begun.
Francis Belin is the president of Asia Pacific at Christie’s. Based in Hong Kong, he also oversees the Asian and World Art departments. A luxury sector veteran, Belin previously ran Swarovski in Japan and in Asia Pacific. He started his career at McKinsey & Company in Europe.
This piece is part of a collaboration between Tatler Asia and Young Presidents’ Organisation (YPO), a global leadership community of chief executives, which counts more than 30,000 members from 142 countries among its members.