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Crypto art (NFT art) has changed contemporary art into a money game!

Sometimes, before we realize it, we have entered into a historical moment.

In 1917, an artist named Marcel Duchamp exhibited a work called “Fountain” at an exhibition in New York by the Society of Independent Artists, which was open to works from all participants. The work called “Fountain” was simply a male urinal. It was denounced by the exhibition judges.

About 100 years later, in December 2004, 500 British art experts named Duchan’s “Fountain” one of the most influential works of the 20th century. It is considered to be the origin of contemporary art.

An event of similar historical importance occurred on March 11, 2021.

The digital artwork “Everydays: the First 5000 Days” by the video artist Beeple (real name Mike Winkelmann) was sold for the high price of $69 million at a Christie’s auction. This was the third-highest price in history from a living artist. By the way, the highest-price work was by Jeff Koons and the second-highest was by David Hockney.

Founded in 1766, Christie’s is the first auction house to handle purely digital art like “Everydays.” After a 10-day online auction, over 22 million people watched the moment of the sale.

Allow me to explain why an artist whose work was virtually unknown managed to sell work at such a high price.

Beeple’s work is part of the new field of “crypto art” (some also call it “NFT art”). It refers to art given unique value through the use of blockchain technology, a technology that also powers cryptocurrencies. By associating a work of crypto art with an NFT (non-fungible token), which keeps a record of the owner and other information, that work can be given “one-of-a-kind” value akin to that of physical artwork. When such works are resold, they will retain a permanent digital record of their history.

Blockchain emerged as the technology behind virtual currencies, but the technology’s strengths have been extended and applied to other fields, including crypto art. The cryptocurrency used for crypto art runs on a blockchain called Ethereum.
Purchasing Beeple’s work required payment in a cryptocurrency called Ether (based on Ethereum, a different blockchain from Bitcoin). Payment required a transfer to Christie’s digital wallet.

Beeple’s work “Everydays” is a collection of 5,000 daily works made over the 14 years since May 1, 2007. Beeple says that he had never priced his works at more than $969.

– An article from 2017 about the release of Beeple’s 3,650th work after 10 years of daily creations.
https://www.vice.com/en/article/78g539/beeple-cgi-master-10-years-everydays-results

However, a month before the high-priced winning bid, there was a sign of things to come.

In February 2021, another work by Beeple called “Crossroad” was resold by art collector and NFT investor Pablo Rodriguez-Fraile less than six months after he had purchased it. “Crossroad” was resold for $6.6 million, close to 100 times the original purchase price. Rodriguez-Fraile’s motives may have been questionable—he seems to have purchased the work due to Beeple’s reputation in the art community. Some people likely gave him information about its investment value, not its artistic value. Or perhaps they are the masterminds!

The intermediary for this transaction was not Christie’s but Nifty Gateway, an NFT trading platform. The sale of “Crossroads” was set up so that the artist receives a percentage of the resale amount. There was a 10% royalty set for the work on Nifty Gateway, so Rodriguez-Fraile’s resale of “Crossroads” should have led to a royalty of about $660,000 to Beeple.

So who was it that placed the winning bid for “Everydays: the First 5000 Days?”

The winner was not a traditional art collector but Metapurse, a Singapore-based crypto fund. The fund was co-founded by Twobadour and another pseudonymous investor named Metakovan, a longtime crypto investor.
https://www.metapurse.fund/

It seems that Metapurse’s win on March 11th was due to cooperation by the pair from different locations. The bidding began five minutes before the end of the auction. In that time, the price of the work jumped from less than $20 million to over $60 million. “We believe it’s a $1 billion dollar piece eventually,” says Twobadour.

The sale featured 33 bidders, 91% of which were new users. By age, 33% of the users were from Generation X (1965-1980) and 58% were Millenials (1981-1996). In other words, 90% of auction participants were first-timers and 60% were from 25 to 40 years old! These were not preexisting art collectors.

According to a 2020 report by L’Atelier BNP Paribas and nonfungible.com, most of Beeple’s work is sold for well over $100,000 and is driving the crypto art boom that pushed the cryptocurrency market to a scale of approximately $250 million.

Conclusion.

Beeple’s auction sale represents a new kind of money game aimed at resale. One could also call it a kind of market manipulation only possible in a market that, unlike the stock market, is still developing and does not have established rules. Traditional art collectors shouldn’t blindly accept this as a speculative move. It is akin to a speculative stock that triples in price from $20 million to $60 million five minutes before market close. It is a work of alchemy that, with 22 million online viewers, transformed human desires into economic value.

For the economic value of an artwork to be maintained for a long period, the work’s “creative value” needs to also be appreciated for a long period. If not, its value will someday crash.

I pray that Beeple can become the next Duchan…

◆References

Platforms for creating and selling NFT art

Platforms where you can buy or resell the works of others and announce your own works without review so long as you have a cryptocurrency wallet and the cryptocurrency Ether (based on Ethereum blockchain).
Rarible
https://rarible.com
Zora
https://zora.co/

Platforms with a review process that handle works by prominent figures, established artists, etc.
Super Rare
https://superrare.co/
Nifty Gateway
https://niftygateway.com/

Platforms not limited to art NFTs that also offer in-game item NFTs and many others
OpenSea
https://opensea.io/assets

◆How to buy crypto art

Digital platforms have a greater variety of works than traditional auction houses.

For example, today it seems that the platform Nifty Gateway will release new work by UK artist D*FACE.
By the way, the work has already sold for $53,600.

#repost @niftygateway
Instantly recognized as one of the UK’s most prolific Urban Contemporary artists, @dface_official has occupied the forefront of his practice since 2005.
His collection drops today starting at 1:30 PM EST
https://niftygateway.com/collections/dface

 

◆Metakovan, mystery buyer of Beeple’s $69.3 million NFT art, reveals identity
http://www.ecoti.in/G6qtpY

◆Who is Vignesh Sundaresan, aka ‘Metakovan’?
Born in India, Sundaresan is 33 years old. He is a graduate of Canada’s Carleton University is currently a cryptocurrency startup entrepreneur based in Singapore.

Vignesh Sundaresan aka ‘Metakovan’ is a Singapore-based blockchain entrepreneur, coder and angel investor. He has announced a $500,000 fellowship for ‘crypto storytellers’ funded by his crypto investment firm, Metapurse.
https://vigneshsundaresan.com/

◆MetaKovan on Why He Spent $69 Million on a Jpeg
https://unchainedpodcast.com/metakovan-on-why-he-spent-69-million-on-a-jpeg/