Artmarket.com: the NFT phenomenon - a market 'disruptor' - Artprice asks: what does it mean for the art market?

PARIS, May 11, 2021 /PRNewswire/ -- NFTs haven't just been invented, but their arrival in the auction sphere has had the effect of a tidal wave. Christie's, Sotheby's and Phillips have each sold their very first Non-Fungible Token in the past two months, while many other auction houses and galleries are getting drawn into the adventure. Artprice recognizes the unlimited creativity at the heart of this new medium as well as its extraordinary demand potential which seems in line with the rapid growth of the tech sector, but also with the aspirations of future generations of collectors.

While the auction summits reached by certain works of Contemporary art are regularly called into question, what about the recent results recorded for Beeple, Pak or Mad Dog? The astronomical records set by Jeff Koons or Damien Hirst, as controversial as they are, do at least crown the entire career of these artists and the gradual construction of their primary, and then their secondary markets. Today, the 7- or 8-digit results achieved by NFTs seem totally unpredictable since the works of these artists had never before circulated on the art market:

Everydays: The First 5000 Days by Beeple
Estimated unknown
Starting price: $100
Price achieved: $69,346,250.

Between art and technology

"NFTs are such innovative inventions that some people are comparing them to the greatest masterpieces in the history of art," explains thierry Ehrmann, President and Founder of Artmarket.com and its Artprice department.

"When Sina Estavi bought the NFT of the very first "tweet" (for $2.9 million) and compared it himself to Da Vinci's Mona Lisa, he expressed what NFTs mean to him, and to many other aficionados of this technology: the advent of a new world of extraordinary artistic talent... a renaissance."

Obviously, not all NFTs are works of art; but some have been created as true digital artworks and propelled to the forefront of the art market by the biggest auction houses on the planet. Artprice is keen to integrate these new forms of art into its databases in order to study their development and provide its members (with Basic, Advanced and Professional subscriptions) with all the necessary information relating to this new market. 

'Red-chips' and NFTs

The arrival of NFTs in the auction sphere seems to be the extension of a recent shift in the traditional art market which has seen collectors increasingly focusing on the latest trends… i.e. 'red-chip' artists.

"Today, the rules have been overturned," explained Isabelle Paagman, Sotheby's Head of Private Sales in Europe during the presentation of the TV show The Next Big Thing.

"Traditionally, an artist first built his reputation and his audience with the help of galleries, building a primary market, then slowly progressing towards the secondary market. Today an artist creates his audience via Instagram and suddenly becomes one of the most desired artists on the planet. The result is we are now seeing at auction artists who are still very young and at the start of their careers." 

This transformation fits perfectly with the NFT technology: digital works circulate freely on the web, on Instagram, on Youtube, etc. while their digital property is secured in a cryptowallet.

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