The Heat of NFT Fades as Top Auction Houses Try Crypto Assets

With the continued rise in the prices of Bitcoin and Ethereum, those in the art industry who once had high hopes for Crypto Assets are eager to try again. Although the NFT market has lost much of its momentum, industry insiders are still seeking new opportunities.

Recently, a well-known auction house announced that it will accept ETH or BTC payments at its first auction in Saudi Arabia. This marks the first time a traditional auction house supports Crypto Assets transactions at an entire live auction for physical items. The auction house stated that this change could attract a new group of buyers in regions where digital art and Crypto Assets activities are active. The auction features a total of 119 lots, including modern and contemporary artworks from the West and Saudi Arabia, luxury goods, and memorabilia from sports stars.

In fact, before the outbreak of the COVID-19 pandemic, the art market struggled to attract people from the tech industry. The rise of non-fungible token (NFT) has indeed brought about a new wave of crypto assets billionaires. NFT is a unique digital asset that connects art with blockchain and can be used to create geometric abstract paintings and cartoon comics.

In 2021, several auction houses began accepting Crypto Assets for the purchase of certain physical artworks. Since then, eligible physical works have started to lean towards technology aesthetics, including a painting created by Keith Haring in 1984 depicting a crowd mesmerized by computers, which sold for £4.3 million. Currently, major well-known auction houses have established dedicated NFT and digital art platforms that support Crypto Assets transactions.

For the art market, practitioners hope to expand the channels for new buyers to enter the high-end art field through NFTs and related alternative coins. Some investors have already transitioned from purchasing digital art to collecting traditional art pieces, with transactions reaching millions of dollars.

However, not everyone welcomes the impact of crypto assets. Some industry insiders believe that the image of encryption mainly targeting young buyers is inconsistent with the lack of diversity in the art auction market itself. Additionally, the skepticism towards newcomers also stems from the inherently conservative and closed nature of the art market.

Moreover, people are concerned that Crypto Assets may become a new avenue for money laundering. Artworks inherently have the characteristic of converting unstable book profits into transferable tangible assets, and tokenized NFTs are more likely to be used for illegal money laundering. Several countries and regions have begun to tighten relevant regulations.

Nevertheless, the auction house is cautiously advancing its Crypto Assets business. According to statistics, a certain auction house reported that its NFT sales have reached $150 million. Although the NFT market has cooled down, industry insiders remain cautiously optimistic about its prospects as the overall environment improves.

Auction house data shows that the average age of NFT buyers is 42, significantly lower than the 54 years of traditional auction buyers. This aligns with some auction houses' strategy of targeting the younger generation, aiming to "preserve cultural heritage while focusing on innovation."

In fact, the art market has been in a slump in recent years and is in urgent need of fresh blood. According to relevant data, the total auction volume of several large auction houses has continued to decline over the past two years. In this context, auction houses may try various ways to attract new buyers and funds, and Crypto Assets are undoubtedly one direction worth exploring.