Wake Up and Smell the Crypto-Art!
When you think of income generating assets, what first comes to mind might be stocks, real estate investments, and artwork. Recently, the rise of crypto-art consider and the emergence of digital asset classes, namely NFTs or non-fungible tokens, have redefined the investment landscape.1 Each NFT is a unique toke and serves to mark digital assets which have been authenticated and recorded on the blockchain.2 Unlike other content that can be copied or forged online, blockchain-based NFTs are encrypted with the artist’s signature and contain detailed information as to the copy’s provenance.3
In purchasing a unique digital artwork in NFT form, buyers obtain “bragging rights and the knowledge that their copy is the ‘authentic’ one.”4 Since the crypto asset market and artworld have collided, it is only a matter of time for individuals to realize that art can be a digital investment. With NFTs, investors can capitalize on new opportunities by diversifying their portfolios and purchasing an authentic digital copy of a GIF animation or meme instead of acquiring a physical bronze sculpture.5 During the pandemic, NFT crypto-art has enjoyed a massive surge in critical prestige, garnering widespread media attention.6 This year, some notable NFT sales have included a digital image of Lindsay Lohan’s face, an animated GIF of a flying rainbow cat, Mark Cuban’s Twitter post, and a video of LeBron James dunking during a Lakers basketball game.7
With the explosion of the crypto-art market, the international auction-house, Christie’s, has boldly penetrated the cryptocurrency scene by auctioning a fully digital NFT artwork for the first time.8 Mike Winkelmann, known to the art community as Beeple, minted his monumental digital collage in a single 316 MC, 21,069 x 21,069 pixel file, entitled EVERYDAYS: THE FIRST 500 DAYS, to sell exclusively on Christie’s.9 This digital collage is a creative masterpiece consisting of 5,000 individual images which capture a dystopian reality, depict political turbulence, and expose society’s obsession and fear of technology.10 While Beeple’s individual artworks range in subject matter, his overall style emphasizes the grotesque and absurd, as he creates oversized 3D political cartoons placed in a video-game like setting.11 On March 11, 2021, Beeple’s digital collage sold online at Christie’s for $69.3 million, making Beeple the third most expensive living artist after Jeff Koons and David Hockney.12
Christie’s foray into the world of blockchain-based NFTs is an important step for the art market to understand the profitable revenue stream behind auctioning authentic digital goods online. Given that NFTs are becoming more mainstream, it will be exciting to see how the Christie’s auction will impact the space of NFT-based art as investments and change the landscape for art dealers, collectors, and buyers.13 So, the next time someone asks about popular examples of income generating assets, do not sleep on digital art and NFTs.
Scott Reyburn, Will Cryptocurrencies Be the Art Market’s Next Big Thing?, N.Y. Times (Jan. 13, 2018), https://www.nytimes.com/2018/01/13/arts/cryptocurrency-art-market.html?action=click&module=RelatedLinks&pgtype=Article [https://perma.cc/ZSQ2-XP28].↩
Ryan Browne, People Are Paying Millions For Clips that Can Be Viewed for Free. Welcome to the World of ‘NFTs,’ CNBC (Mar. 3, 2021, 8:35 PM), https://www.cnbc.com/2021/03/03/what-are-nfts-all-you-need-to-know-about-crypto-collectibles.html [https://perma.cc/S6QD-QLWV].↩
Dave Hanson, NFT Crypto Explained– Non Fungible Token Art is Blowing Up, YouTube (Feb. 25, 2021), https://www.youtube.com/watch?v=WA–4fRXA64&ab_channel=DaveHanson%2FHeythere%2CDavehere.↩
Erin Griffith, Why an Animated Flying Cat with a Pop-Tart Body Sold for Almost $600,000, N.Y. Times (Feb. 22, 2021), https://www.nytimes.com/2021/02/22/business/nft-nba-top-shot-crypto.html?action=click&module=RelatedLinks&pgtype=Article [https://perma.cc/F5DR-X53G].↩
Katharine Gemmell, Should You Buy a Bitcoin-Inspired Image of Lindsay Lohan, Bloomberg (Mar. 8, 2021, 6:30 AM), https://www.bloomberg.com/news/articles/2021-03-08/bitcoin-btc-mania-boosts-crypto-art-such-as-a-lebron-video-are-nfts-worth-it [https://perma.cc/3SLE-7LG4].↩
Aaron Mak, What the Heck Are NFTs, and Why Are Grimes, Lindsay Lohan, and the Guy Who Made Nyan Cat Selling Them?, Slate (Mar. 5, 2021, 5:50 AM), https://slate.com/technology/2021/03/nft-non-fungible-tokens-grimes-mark-cuban-lindsay-lohan-explained.html [https://perma.cc/32FV-JRUG].↩
Josie Thaddeus-Johns, Beeple Brings Crypto to Christie’s, N.Y. Times (Feb. 24, 2021), https://www.nytimes.com/2021/02/24/arts/design/christies-beeple-auction-blockchain-art.html?action=click&block=more_in_recirc&impression_id=bf627734-7b55-11eb-a966-a3e08d478c97&index=5&pgtype=Article®ion=footer [https://perma.cc/4A6R-755B].↩
Jessie Damiani, From Crypto to Christie’s: How Beeple Put Digital Art on the Map–And Then Catalyzed Its Market, Forbes (Feb. 16, 2021, 8:00 AM), https://www.forbes.com/sites/jessedamiani/2021/02/16/from-crypto-to-christies-how-beeple-put-digital-art-on-the-map-and-then-catalyzed-its-market/?sh=7d07e9d06a06 [https://perma.cc/LEP6-UNNH].↩
Beeple’s Opus, Christie’s, https://www.christies.com/features/Monumental-collage-by-Beeple-is-first-purely-digital-artwork-NFT-to-come-to-auction-11510-7.aspx?sc_lang=en&cid=EM_SEM|ACCT:ChristiesPWC|CMP:20447BeepleONLINEFeb20BrandUS|AG:BeepleGeneralBroad|ENGINE:GOOGLE|NT:SEARCH|RG:US|BANNER:|IMG:|KW:beeple|MT:b|SID:20447Beeple?rnd=1&gclid=Cj0KCQiA4feBBhC9ARIsABp_nbUwrrH1IVNNX4da7eCQFD5LQc8WV_7bGaruNJrmkrrb9A84dszkdg8aArOrEALw_wcB [https://perma.cc/Q5ZE-GAPK].↩
Kelly Crow & Caitlin Ostroff, Beeple NFT Fetches Record-Breaking $69 Million in Christie’s Sale, Wall St. J. (Mar. 11, 2021, 10:48 AM), https://www.wsj.com/articles/beeple-nft-fetches-record-breaking-69-million-in-christies-sale-11615477732 [https://perma.cc/5CJ7-FLWR].↩
Taylor Locke, Mark Cuban Is Bullish on NFTs, and They’re about to Go More Mainstream with an Auction at Christie’s, CNBC (Feb. 18, 2021, 2:02 PM), https://www.cnbc.com/2021/02/18/christies-to-auction-beeple-nft-art-and-will-accept-ether-as-payment.html [https://perma.cc/972Q-K9T4].↩