ART MARKET WATCH H1.2021
Historic turning point: The art market 2.0 is expanding and becoming part of the financial market
banksy and NFTs are revolutionizing the art market
by Ruth Polleit Riechert // released for publication – proof requested
The times couldn't be more exciting: The pandemic has accelerated the digitization of the art market. The traditional art market is being shaken up by the disruptive niche of digital art and certification with NFTs (non-fungible tokens), market boundaries are being broken down and previous structures are being questioned, and artists' careers are now possible without galleries. Who benefits from this, who is left behind?
The art market has recovered quickly – also due to NFTs
Auctions have returned to pre-coronavirus crisis levels. The global art auction market generated sales of $6.9 billion in the first half of 2021, up from just over $2 billion in the first half of 2020 and even up three percent compared to the first half of 2019, according to a study by price documenter artprice.
An analysis by ArtTactic comes to a similar conclusion: global auction sales of the three largest houses, Christie’s , Sotheby’s and Phillips, totaled $5.9 billion in the first half of 2021, an increase of 230 percent over the same period in 2020.
Works in the mid-price segment in particular found buyers
Likewise, the number of works of art sold in H1 2021 increased by 5 percent compared to 2019. The increase was particularly strong in the lower and middle segment for works of art between 1,000 and 20,000 US dollars than in other price categories, namely 13 percent. The number of works of art sold, on the other hand, decreased by 1.4 percent in the high-priced segment of 1 to 50 million US dollars.
Tablet with Beeple pattern "EVERYDAYS: THE FIRST 5000 DAYS". Photo: mundissima / Shutterstock.com
NFTs are establishing themselves as a securitization of digital art, masterpieces and their fractionalization: A new chapter in the development of the art market has begun
The rapid recovery of art auctions was particularly spurred by the offering of NFTs - they stand for digital securitization of the ownership of analogue works of art or parts thereof. The work "Everydays: the First 5000 Days" by the artist Beeple (real name Mike Winkelmann) was sold at Christie's in March 2021 for 69 million US dollars (including fees) to the 32-year-old South Asian tech entrepreneur Vignesh Sundaresan - also known under the name MetaKovan.
The sale of “Everydays: the First 5000 Days” at Christie's generated 1% of total sales at auction in the first half of 2021
Beeple is now the fifth most expensive work sold in the first half of 2021 and ranks among the classics - without the usual route via galleries and exhibitions. In the list of prices achieved in H1.2021, only works by Pablo Picasso (103.4 million US dollars), Jean-Michel Basquiat (93 million US dollars), Sandro Botticelli (91.2 million US dollars) and Claude Monet (70.4 million US dollars) achieved even higher sums - including fees.
The invention of NFTs is an art-historical milestone for digital art
Digital art, which was previously easy to copy, becomes unique and tradable through non-fungible tokens (NFTs). Certified by an NFT, it is upgraded to a unique piece and can rise to the price category of first-class masterpieces.
But it's not just digital art that can be traded using NFTs. For every physically created work of art, one or more NFTs can now be created in the form of fractionalization and then traded. The logical step is that masterpieces are made tradable using digital shares. Interested parties can thus become shareholders in classics with entry-level amounts in the lower to middle price range. Special trading platforms are also being developed for this purpose.
The distribution of NFTs or tokenized art is the really new thing – it is revolutionizing the art market
The sale of NFTs takes place via marketplaces (trading platforms) that offer all kinds of digital collectibles and are accessible to every artist and every buyer. The prices and transactions are visible and transparent. The advantage for the artists: They participate in every resale and the increase in value of their works.
The popularity of the NFT industry has exploded this year, with NFTs totaling $28.21 million in Q3 2020 to $10.7 billion in Q3 2021, according to DappRadar 's report.
Distribution through third parties such as galleries will become unnecessary for art that uses NFTs - unless they get into the business themselves: One of the largest galleries in the world, the Pace Gallery in New York, has announced the creation of its own platform for NFTs. Internationally established artists such as Damien Hirst and Jeff Koons have already issued NFTs or say they plan to do so soon.
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Memberships:
Association of German Art Historians
Digital Art History Working Group
German Castle Association
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Source: Art Market Watch H1.2021, Dr. Ruth Polleit Riechert | RPR ART
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