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Why auction houses and digital art make NFTs mainstream

Why auction houses and digital art make NFTs mainstream

NFT fans have been waiting for NFTs, or non-fungible tokens, to go mainstream, and it looks like the art sector could be their way in.

Writing in CoinDesk, crypto journalist Jeff Wilser enthuses that “art and collectible NFTs have gone mainstream with breathtaking speed – faster than even the most starry-eyed, to-the-moon crypto bull could have dreamed.1

For investors, this could be excellent news for some NFT stock prices. Just look at what happened to Creatd: the company announced the creation of 3 NFTs of images of former president Donald Trump, to be sold in OpenSea, and its share price promptly rose 68%2.

NFT artworks could be the vehicle that brings NFTs to the big time.

What is an NFT and what are NFT stocks?

NFTs are blockchain-based tokens that represent a digital asset. NFTs enable digital artworks to be owned and auctioned just like physical paintings or sculptures, with the NFT token proving ownership and recording transaction history.

But the answer to “what is an NFT stock” has to include companies involved in the underlying blockchain and tech and NFT trading platforms like OpenSea, as well as those like Creatd which are producing NFT digital content.

2021 saw NFT art activity skyrocket

2021 could be the year of the art NFT. So far, total NFT art sales hover around $3.5 billion, and are predicted to reach $13.5 billion by the end of the year3. The total monthly value of NFT art sales rose from around $63 million in April to $774.1 million in September. Although October saw that drop to $336.9 million, that’s still an immense rise from earlier in the year.4

(source: https://www.statista.com/statistics/1235263/nft-art-monthly-sales-value/)

This year saw an explosion in the number of art NFT events around the world. The prestigious Art Basel art fair in Switzerland exhibited and sold its first art NFTs in October5; in Miami, the offshoot Art Basel Miami Beach announced that the blockchain platform Tezos will present an NFT exhibition6; Prinseps became the first auction house in India to sell NFTs7; and in the UK, the Saatchi Gallery hosted an immersive NFT art private view and auction8.

Auction houses are leading the charge on art NFTs

2020-2021 saw even the most traditional auction houses embrace the new trend of digital art. Sotheby’s sold The Fungible Collection of digital art for over $17 million in April 20219 and the Natively Digital collection for $17.1 million in June10, and is about to open Natively Digital 1.2: The Collectors, a 53 piece collection of digital art featuring the likes of CatDad, Loopify, Paris Hilton and J1mmy.eth11]. Meanwhile, Christie’s announced over $100 million in NFT art sales, including the landmark Beeple auction in October 202012.

As well as original NFT digital art, we’re seeing a surge in NFTs minted from traditional artworks. March saw NFT platform Mintable sell an NFT of a 19th-century painting for $47,00013; in September, the Hermitage Museum in Russia sold NFTs of 6 works, including paintings by da Vinci and Kandinsky, for over $400,00014; and the British Museum in London is selling NFTs of works by Japanese artist Katsushika Hokusai, including the iconic, The Great Wave Off Kanagawa15.

NFT art sales have gone so well that leading auction houses Sotheby’s and Christie’s have created their own infrastructure so they can handle blockchain payments (so far, payments for NFT sales were handled by a third party)16.

But auction houses are also seeing the benefits

This activity is helping link the traditional art market with the rising digital NFT art economy, creating a place for NFT art within the larger art ecosystem and adding to its prestige. Olive Allen, whose work was sold at Art Basel, said “The fact that NFTs were exhibited at a major art fair like Art Basel is a huge milestone towards its acceptance as an art medium on par with painting and sculpture.17

High profile NFT art auctions help connect digital art and artists with HNW individuals who aren’t typically in the vanguard of tech adoption. Research carried out by Swiss bank UBS reported that 48% of the art collectors surveyed would be interested in purchasing digital art in the next 12 months18.

But the benefits go both ways. NFTs might gain from the reputation of established art sellers, but galleries and auction houses are overjoyed to welcome NFT art buyers, who are mostly younger and new to art auctions. Research found that millennial collectors are driving digital art sales, spending an average of $378,000, triple as much as Gen-X and Boomers19, and analysts at data platform Fifty.io concluded “The audience for NFTs could not be more different to that of the traditional art world.20

source: “NFTs go mainstream: breaking down the global audience” September 17, 2021 https://fifty.io/blog/nfts-go-mainstream

All the bidders for the Beeple work were unknown to Christie’s21, and were mostly under 4022. “We signed up more clients that were new to us than ever before for a single lot,” says Alex Rotter, chairman of post-war and contemporary art at Christie’s. “That tells you this is an entirely new category of buyers.23

In fact, NFTs are credited with reviving contemporary art sales. Contemporary art auctions rose to $2.7 billion in 2020-2021, a jump of 117% which is “largely due to the digitisation of art”, according to a report by Artprice.24

Art world’s embrace is showing what NFTs could do

With art galleries and auction houses embracing art NFTs, investors are giving the sector a second look. NFT stocks are becoming more appealing, especially to those whose taste doesn’t run to digital art, but ongoing volatility around NFT stock prices makes it challenging to pick the best NFT stocks from any NFT stocks list. 

An NFT ETF, which companies involved in related sub-sectors like blockchain or cryptocurrency as well as a number of top NFT stocks, can offer a good opportunity to spread your investment and help mitigate your exposure to risk. 


1 “15 NFT Use Cases That Could Go Mainstream” October 14, 2021 https://www.coindesk.com/business/2021/10/14/15-nft-use-cases-that-could-go-mainstream/

2 “Creatd surges 68% after announcing a line of Trump NFTs, including an infamous picture of the former president signing a model” October 25, 2021 https://markets.businessinsider.com/news/stocks/creatd-stock-price-surges-on-donald-trump-nft-2021-10

3 “NFT art sales hit $3.5bn so far this year—but market is still volatile” October 22, 2021 https://www.theartnewspaper.com/2021/10/22/nft-art-sales-hit-dollar35bn-so-far-this-year

4 “Total value of sales involving a non-fungible token (NFT) in the art sector worldwide over the previous 30 days from April 12 to October 15, 2021” taken from https://www.statista.com/statistics/1235263/nft-art-monthly-sales-value/

5 “Art Collectors Swoon Over NFTs at Elite Basel Gathering” September 25, 2021 https://www.coindesk.com/business/2021/09/25/art-collectors-swoon-over-nfts-at-elite-basel-gathering/

6 “Tezos to Present NFT Exhibition at Influential Art Basel Miami Beach Show” October 7, 2021 https://www.coindesk.com/business/2021/10/07/tezos-to-present-nft-exhibition-at-influential-art-basel-miami-beach-show/

7 “Inside an NFT art auction: Prinseps’ founder on adopting new tech, the future of crypto art in India” July 5, 2021 https://www.firstpost.com/art-and-culture/inside-an-nft-art-auction-prinseps-founder-on-adopting-new-tech-the-future-of-crypto-art-in-india-9771841.html

8 “How London is becoming the centre for digital art and NFT auctions” October 12, 2021 https://uk.finance.yahoo.com/news/how-london-is-becoming-the-centre-for-digital-art-and-nft-auctions-050022578.html

9  “$17 Million Realized in Sotheby’s First NFT Sale with Digital Creator Pak” April 16, 2021 https://www.sothebys.com/en/articles/17-million-realized-in-sothebys-first-nft-sale-with-digital-creator-pak?locale=en 

10 “Sotheby’s Second Natively Digital Auction Honors NFT Collectors” October 10, 2021 https://nftevening.com/sothebys-second-natively-digital-auction-honors-nft-collectors/ 

11 “Sotheby’s Second Natively Digital Auction Honors NFT Collectors” October 10, 2021 https://nftevening.com/sothebys-second-natively-digital-auction-honors-nft-collectors/ 

12 “Christie’s surpasses $100 million in NFT sales” September 28, 2021 https://www.christies.com/about-us/press-archive/details?PressReleaseID=10210 

13 “Crypto millionaires’ love of NFTs is a boon for the aging art market—but galleries may miss out” April 14, 2021 https://fortune.com/2021/04/14/nft-non-fungible-token-art-crypto-art-market-galleries-auction-houses/ 

14 “NFT mania is sign of a land grab for the online ‘metaverse’” September 9, 2021 https://amp.ft.com/content/1ae22d81-4c23-4475-8661-354f1b8dbc7c 

15 “How London is becoming the centre for digital art and NFT auctions” October 12, 2021 https://uk.finance.yahoo.com/news/how-london-is-becoming-the-centre-for-digital-art-and-nft-auctions-050022578.html

16 Tweet, September 7, 2021 https://twitter.com/ChristiesInc/status/1435346651217108996?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1435346651217108996%7Ctwgr%5E%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fblockonomi.com%2Fchristies-to-accept-eth-bids%2F “Sotheby’s Metaverse: The art auction house opens its own NFT marketplace” October 15, 2021 https://nftevening.com/sothebys-metaverse-the-art-auction-house-opens-its-own-nft-marketplace/

17 Art Collectors Swoon Over NFTs at Elite Basel Gathering” September 25, 2021 https://www.coindesk.com/business/2021/09/25/art-collectors-swoon-over-nfts-at-elite-basel-gathering/ 

18 “Art Collectors Swoon Over NFTs at Elite Basel Gathering” September 25, 2021 https://www.coindesk.com/business/2021/09/25/art-collectors-swoon-over-nfts-at-elite-basel-gathering/ 

19  Art Basel and UBS Art Market Mid-Year Review 2021 https://www.ubs.com/global/en/our-firm/art/collecting/art-market-survey.html, statistic cited by “Art Market Goes Into Overdrive As Wealthy Up Their Spending By 42%” September 9, 2021 https://www.forbes.com/sites/oliverwilliams1/2021/09/09/art-market-goes-into-overdrive-as-wealthy-up-their-spending-by-42/?sh=6f83e1fb694c 

20  “NFTs go mainstream: breaking down the global audience” September 17, 2021 https://fifty.io/blog/nfts-go-mainstream 

21 “Crypto millionaires’ love of NFTs is a boon for the aging art market—but galleries may miss out” April 14, 2021  https://fortune.com/2021/04/14/nft-non-fungible-token-art-crypto-art-market-galleries-auction-houses/ 

22  “NFTs are bringing back contemporary art sales” October 4, 2021 https://mashable.com/article/nft-contemporary-art-sales 

23  “Crypto millionaires’ love of NFTs is a boon for the aging art market—but galleries may miss out” April 14, 2021  https://fortune.com/2021/04/14/nft-non-fungible-token-art-crypto-art-market-galleries-auction-houses/ 

24  Report “LES NFT BOUSCULENT LE MARCHÉ DE L’ART CONTEMPORAIN” October 4, 2021 https://www.bfmtv.com/economie/patrimoine/les-nft-bousculent-le-marche-de-l-art-contemporain_AD-202110040125.html cited by “NFTs are bringing back contemporary art sales” October 4, 2021 https://mashable.com/article/nft-contemporary-art-sales