Speedy CryptoArt: market pricing of NFT artworks created by Damien Hirst
Speedy CryptoArt (based in Estonia) has officially started selling Damien Hirst’s NFT works!
If it weren’t for the digital age, we’d have never heard of such an awesome thing.
Under the concept of “Can I create a bank using virtual currency?”, Damien Hirst created a series of 10,000 artworks of dots, titled “The Currency,” at a price of $2000 each, for a total market value of $20 million. See below for details on the production method.
If you choose the NFT, the physical picture will be discarded, and if you choose the physical picture, the NFT will be discarded. What choices the buyers made will be announced at a later date. Damien jokingly says, “What if everyone chooses the NFT?”
At the time of writing on September 4, the OpenSea marketplace (a leading platform for NFT art) has 1,636 of Damien’s works on display.
While the price for primary sales (such as to galleries) was $2000, less than two months after release, the works have been offered in the secondary market (such as in auctions) for around $5.5 million (1 Ether=$3900), and winning bids have been around $2.7 million (7 Ether). Current prices are 14 times higher than the original purchase price.
The interesting thing here is not the value from the perspective of art collectors, but rather how NFT art is regarded by investors.
16% of the total production (quantity issued) is already in circulation in NFT form. (There could be some on platforms other than OpenSea, so maybe it is actually more than 20%?)
Digital is easier to distribute than analog. If this were a Christie’s or Sotheby’s auction (secondary market), it would take more time to prepare for the sale. But with an NFT, you can put it on the secondary market instantly using a digital marketplace such as OpenSea.
With over 1,600 pieces of Damien Hirst’s “The Currency” already on display, I think investors have now developed a more stable understanding of the market. What’s important to understand is that NFT art created as an individual piece only has a single price, meaning only specialized art investors can understand its quality and value. That’s why, if something could be sold for 1 cent or $1 million, it can’t be priced by looking at similar market valuations. In other words, it doesn’t have the same kind of transparent pricing.
Because money is originally issued by the state, it can be trusted and has circulation value. This is how market prices are built up. In the South American country of El Salvador, people had been using the US dollar instead of their own currency for a long time, when the president decided to adopt Bitcoin as legal tender. The IMF does not approve of this political decision, but it looks like the outcome here will be decided by market demand.
Back to the main story.
The physical Damien paintings have not yet been delivered to the buyers, so the resale value of the physical ones is unknown, but it will be interesting to compare the value of physical and digital in a few years. By the way, I own two pieces. One digital, one analog was what I decided.
In order for NFT art to have widespread acceptance in the future, it is essential to have creativity with great conceptual designs, but being able to create an active market for the works is also key.
Damien Hirst poses the ultimate choice between NFT art and physical art (July 19, 2021)
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