Friday, June 16, 2023 took place the first auction combining the real works and the associated NFTs. This Private Museum event took place in the famous Drouot auction house (France, Paris, 9e arrondissement) and brings together the works of 4 artists. While the NFT market is still in a fairly depressed state, the combination with the physical art market still looks promising. Decryption of the event and the supporters of the art market.
A first auction combining works and NFT
It’s a new approach to the art market: combining the physical aspect of works and their digital aspect. However, without being a specialist in the art market, we notice that the antistatic styles that are successful are quite different in the physical world and in the digital world. And the more recent advent of Artificial Intelligence seems to further increase an ever more accessible and on-demand art.
But the combined sale of a work with its NFT is certainly a new principle. Indeed, the holder of the work is then free to negotiate the (unique) NFT or the physical work itself. It’s really a kind of combination of a digital and certified (NFT) art market and traditional physical art. A first… A few auctions have already been carried out in the past, but they only focused on the digital work. The famous Christie’s house was thus the first to sell an NFT in 2021.
Thus, the interest of the recent initiative of Private Museum in 2023 is twofold: on the one hand because it takes effect in France (better known for its old paintings than its NFTs), and on the other hand because it brings together for the first time real works with their NFTs .
The explosion and relapse of the NFT market
Sales of NFTs (non-fungible tokens) have generated considerable excitement in 2021, with several record-breaking transactions capturing the attention of the public and the digital art world. Among these sales, let us quote some examples like “Everydays: The First 5000 Days” by Beeple (March 11, 2021). This digital work of art was sold at auction by Christie’s for the astronomical sum of $69.3 million. Indeed, this sale marked a major turning point for the NFT market and made Beeple, real name Mike Winkelmann, one of the most prominent digital artists.
Similarly, CryptoPunk #7804 (2021) which was one of the first NFT projects, sold for $7.6 million at auction. As a reminder, CryptoPunks are unique and collectible pixelated characters, and this sale demonstrated the growing appeal of rare digital works. For many commentators, the NFT transactions observed in 2021 were clearly disconnected and disproportionate to market reality. Indeed, since 2021, the NFT market has struggled to regain real structural momentum with the fall in the price of cryptocurrencies.
A still depressed NFT market
Clearly, the NFT craze has been fueled by several factors, including the uniqueness and verifiable ownership of digital works, as well as the growing popularity of cryptocurrencies. However, more recently, there has been a decline in interest in art NFTs.
Indeed, the traded volume of NFTs on the main platforms measured by The Block has fallen from $5.35 billion in January 2022 to only $675 million for May 2023. That is an 87% reduction in volumes on the market since the peak recorded in January 2022! As a result, some recent sales have not generated as much excitement as before, and selling prices have fallen. This effect is mechanical since NFTs are traditionally indexed to the price of cryptocurrencies which have fallen in recent months. Despite everything, at the start of 2023 we noticed a return of interest in the NFT market. Volumes traded in February 2023 amounted to $1.7 billion.
An auction with a deceased artist and new talents
The works presented last Friday bring together artists recognized as John HarrisonLevee (died in 2017), but still new talents like the young Werner Wilfred or the painter Evens Arcelin, or the prized sculptor Mariko who showed herself through her three sculptures of Napoleon. These contemporary works mark their time and find a certain echo in the NFT. Among the paintings, some have even been exhibited at the MOMA (MUSEUM OF MODERN ART NEW YORK), such as John Levee’s painting from 1988 (loaned from 1988 to 1993).
These contemporary paintings ensure a certain coherence with the universe of NFT. Thus the abstract paintings of Werner Wilfred show a cohesion with his youth and his moods. Similarly, the sculptures of the artist Mariko gave rise to 3D NFTs. We could also recall the global nature of this initiative with the artist Evens Arcelin who sent his works from Haiti… In total, the auction exhibited nearly 90 works, and therefore as many NFTs!
This auction was a real risk for its initiators because it depends on the attractiveness of the contemporary art market, digital art, but also on the attractiveness of the cryptocurrency market. In the middle of the Viva Tech show in Paris, investors are sometimes more focused on artificial intelligence than on art. But it is clear that this unique event remains the consecration of several months of work and revives hopes and a clear vision of what the art market could be like in 10 or 20 years. The art market would perhaps gain in relevance if it combined the generation of auction rooms with the generation of cryptocurrencies.
Why this project and this auction?
We interviewed the co-founder of Private Museum, Thomas ROCHE, on the reasons that led these traditional art players to position themselves on the digital market.
“Our NFT marketplace allows you to acquire 1/1 art NFTs, accompanied by their certificate of authenticity. »
Thomas ROCHE, co-founder.
Their motto can be summed up as “THE WORK THAT NEVER LEAVES YOU”. In this regard, it must be said that NFTs make possible the emergence of the “Amazon” of art, by exchanging digital works linked to a real work. But this remains complex in a context where the traditional market and the digital market remain very fragmented.
“Our founders united their passion for art and blockchain to create Private Museum. With over 30 years of experience as art collectors, we have built a team and network of leading art experts and curators, to deliver the very best from talented artists. Our vision is to enable artists to establish international acclaim while providing collectors with exceptional, certified and authenticated works of art. »
Thomas ROCHE, co-founder.
To date, we will finally specify that most transactions on the traditional art market take effect on small amounts. The art market should be conceived as an aggregate of small collectors, and record transactions are a tiny minority of the whole. According to Art Market Researchthe active art market has retreated in 2021, but it remains significantly higher than its last major low of 2011. The end of 2022 and the beginning of 2023 would have marked new highs in the art market. ‘art…
In conclusion
If the art market is often perceived as reserved for insiders, innovative attempts seek to shed light on the intricacies of this market and to democratize its distribution. Just as the stock market was reserved for a certain population just a few decades ago, the traditional art market could be in the grip of democratization with the help of digital technology. In fact, the birth of the NFT market makes works accessible to a considerable number of individuals at prices and styles as different as each other.
Despite everything, the NFT market is still evolving in volumes much lower than those observed in 2021. The recovery observed in activity at the start of 2023 does not seem to be continuing and we must still wait for new triggers. The link between the digital art market and the traditional art market is therefore a broader and more ambitious challenge, and the involvement of players already present on the traditional art market gives encouraging signals.
Thus the very first auction combining real works with their NFT took place in Paris in the famous Drouot house. This auction comes in a still depressed context of the NFT market, but it certainly marks a historic step in the trajectory of digital and cryptocurrencies. A singular event of the ecosystem.
Nota Bene: photographs of the paintings distributed with the authorization of their owner.
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