That day, at Christie's auction house, no one raised the trowel, there was no hammering.
And yet, one of the biggest bids in recent years took place.
The First 5000 Days
, by
the artist known as Beeple, sold on March 11 for $ 69.3 million. "It is the third highest price ever achieved by a living artist," says Beatriz Ordovás, director of the department of postwar and contemporary art at Christie's Spain. But this sale marked a milestone not so much because of the price, but because it was the first time that a large auction house had offered a work of digital art, paid for in cryptocurrency and auctioned online. The authenticity of Beeple's work was guaranteed by a
non-fungible token
(NFT), a unique digital certificate that is associated with a file. In a world where everything can be replicated with a simple copy and paste, NFTs give an image uniqueness, endow it with the value of the exclusive. "They work as a guarantee of authenticity," Ordovás explains. Beeple's work, a huge
collage
of 5,000 illustrations, may have artistic value. But it is the NFT that endows it with an economic value. There are those who see in these assets a revolution that will change the art world forever. And those who denounce the growth of an economic bubble. One that, when it explodes, will leave no trace but a pile of smoke.
Before making history at Christie's, the median value of a Beeple work was around $ 100.
“Digital artists could not sell their art like those who worked the physical.
NFTs have put an end to this discrimination, ”explains Primavera De Filippi, a researcher at the Berkman-Klein Center for Internet and Society at Harvard University and the French National Center for Scientific Research.
De Filippi has an optimistic view of this technology.
He believes that he has valued the work of artists like Beeple by replicating the limitations of the physical in the digital world: "NFTs have artificially created a form of digital scarcity and this revalues a work."
The expert claims that this technology has introduced new artists to the art market.
Also to new buyers.
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According to the 2020 NFT Report, the value of the digital art market grew by 299% last year.
And it's just the tip of the iceberg: this technology can be associated with the luxury market, video games, music ... The first tweet from Jack Dorsey, one of the creators of Twitter, was sold associated with an NFT for almost three million dollars in March.
A few days later, a meme (Nyan the Cat, a cat with a rainbow trail) reached $ 600,000.
The New York Times
then analyzed the phenomenon with a column whose headline already said it all: "This item was auctioned for $ 560,000 (and we'll tell you why)."
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The NFT auction overflows with the purely technological elements.
The singer The Weeknd last April sold a collection of music and videos, associated with an NFT, for two million.
Ozuna, Steve Aoki, and other musicians have also launched into this emerging market.
The Hermitage Museum in St. Petersburg will photograph his works and
tokenize them,
selling images that are in the public domain for thousands of dollars.
Virtually any asset is likely to be sold for an astronomical amount.
The First 5,000 Days, by the artist known as Beeple, which sold on March 11, 2021 for $ 69.3 million at Christie's.
Astronomical prices ... and illusory
NFTs are not bought with legal tender, but with cryptocurrencies. These are digital currencies, decentralized and based, like NFTs, on blockchain technology, which guarantees the veracity of internet operations. The most commonly used cryptocurrency in NFT trading is ethereum. Its value has climbed more than 1,700% since the beginning of 2020. Many believe that this growth is not organic. "It is clear that there is speculation," says Andrés Guadamuz, a professor at the University of Sussex who is an expert in intellectual property in the telematic environment. "Many of us who have been watching this world have been taken by surprise by this fashion." Guadamuz places the turning point at the beginning of this year, and signals the sale of Beeple's NFT as the definitive push of a trend whose traction, however,begins to show signs of exhaustion.
Activity associated with NFTs has varied wildly across all trackable metrics. The number of people using NFT markets fell 80% from a peak of 650,000 at the beginning of the year to about 128,000 in the first week of August. In terms of sales volume, last February it was bordering on an impressive $ 200 million. The interest was drastically reduced in the following months, scoring just 25 million in May, according to the Statista website. Some saw in these signals the agony of the NFTs. Others believed they were only proving its extreme volatility. The market has ended up agreeing with the latter, as in August NFT sales set a new record (206 million dollars). Nobody knows the path they will take in the next few months. "Ethereum is a very unstable cryptocurrency," says Guadamuz. "And therefore,the astronomical prices we are talking about are, to a certain extent, illusory ”. The changing value of this cryptocurrency and the impossibility of its daily use push investors to make risky bets, increasingly disconnected from the real world. It's like playing poker for Monopoly money. "This is very real", disagrees the researcher Primavera De Filippi. “You cannot make the purchase with ethereum, but you can exchange it for legal tender whenever you want. It's like saying that gold is a fictitious asset because you can't go buy the bread with gold bullion ”.It's like playing poker for Monopoly money. "This is very real", disagrees the researcher Primavera De Filippi. “You cannot make the purchase with ethereum, but you can exchange it for legal tender whenever you want. It's like saying that gold is a fictitious asset because you can't go buy the bread with gold bullion ”.It's like playing poker for Monopoly money. "This is very real", disagrees the researcher Primavera De Filippi. “You cannot make the purchase with ethereum, but you can exchange it for legal tender whenever you want. It's like saying that gold is a fictitious asset because you can't go buy the bread with gold bullion ”.
CryptoPunks (NFT works) exhibited in New York in May.Alexi Rosenfeld / Getty Images
Speculation has been a part of art collecting long before NFTs appeared. But the novelty and ignorance of this technology makes it much more risky here. "Trading new and relatively unknown instruments like NFTs is not so much an investment mode as a gamble," said Jo Michell, associate professor at the Bristol School of Economics. The bet is risky, since the changes in trends in this market do not obey relatively predictable behaviors such as the progress of a company or the career of an artist. "Much of the action is driven by herd-chasing behavior," notes Michell. And in the crypto art herd, not all cattle are worth the same. "The great fortunes are willing to spend large sums of money on status symbols,like the NFTs ”, affirms the economist. "This leads to other more humble investors imitating them, thinking that it is an easy way to make money." But it's not always like this.
Psychoanalyzing the collector
There is another aspect, beyond the economic one, that could explain the reason for the crypto art fever.
Psychology.
Emotional attachment to certain items, the social status we attribute to them, affects our understanding of their value.
Collecting is based on this mechanism, from philately to the tulip crisis, when the bulbs of this flower reached exorbitant prices in the Netherlands in the seventeenth century.
Then bulbs were exchanged for mansions, in the wildest example of how collecting can generate economic bubbles.
Matt Stephenson is a PhD candidate at Columbia University. Investigate behavioral economics and NFTs from a psychological perspective. "People are excited about them because they have certain properties of real-world objects that we are used to," he explains. “They are unique, they can be owned, sold, destroyed and traced through time. As a result, if an artist creates NFT art, it has the same properties as a traditional painting. "
The fact that people pay millions for an NFT but not for a JPG file (another digital format in which images are saved) says more about us than it does about the art market, Stephenson notes.
"Cognitive psychology suggests that humans can distinguish between virtually identical objects based on an intricate set of socially accepted interests, beliefs, and intentions," he says.
Its value therefore has a social component.
More information
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I'll change it!
In early May, Kyle Swenson's Twitter began to fill with monkeys. Monkeys with sunglasses, monkeys with Hawaiian shirts, monkeys with sailor hats, frozen smiles and jaded grins. It was all a little weird, Swenson thought. Until this 25-year-old Florida salesman bought his own monkey avatar and got it all. Thus he entered the Bored Ape Yacht Club (bored ape yacht club), a website that sells avatars associated with NFT. It was launched on April 30, putting 10,000 images of primates up for sale. Each avatar, with a cartoon aesthetic and different characteristics that make it unique, was released for a price of about $ 200. They disappeared in one day. Most users bought several to resell or exchange them.Today they can only be purchased second-hand on the Open Sea platform. The cheapest is about $ 45,000. It's the crypto market, buddy.
Not all monkeys cost the same.
There are some, the rarest, that reach astronomical figures.
Others, more common, are more easily available.
In a way they are like trading cards.
Only in this case, with each chrome, thousands of dollars are moved.
Swenson has two Bored Apes, two Bored Ape Kennels, some Goatz, some Pudgy Penguins, Alien Boys… These are all part of different NFT collections.
Just as there were stickers of football players and Disney movies on the kiosk, there are NFT collections of all kinds on the internet.
The Bored Apes have been the last to become fashionable.
The first, and most successful, were the CriptoPunks.
One of these eight-bit images sold at Christie's last May for almost $ 17 million.
But why do people pay such exorbitant amounts for what is still a jpg file?
"From an artistic point of view, I would tell you that they are filthy," confesses intellectual property expert Andrés Guadamuz, "but the value of the CriptoPunks is that they were the first."
The researcher Primavera De Filippi agrees with him, who even recognizing their simplicity, defines them as
avant-gardeists,
and highlights their similarity to the work of a contemporary art pope.
“It's like [Marcel] Duchamp, who was the first to create
ready-made
works
[everyday objects that were transformed into art just because of the context].
That is why his works have value, because they are pioneers ”.
Monkey Follow Monkey
The first rule of the Bored Ape Yacht Club is simple: "Monkey follows monkey." And Kyle Swenson confirms that it is strictly adhered to. "Before I joined I barely had a following on Twitter, now I have a couple thousand," he proudly confesses. The social component of these NFT communities is important, it is not about getting more impact on Twitter, but about obtaining status and creating noise around the collectible so that it is revalued. What makes you cooler sometimes makes you richer.
There are no yachts or monkeys, but the Bored Ape Yacht Club really functions as a social club. "When you buy a primate you join a community," says Swenson, who has created the
Bored Ape Gazette
,
a newspaper to review the most relevant news of this community. Matt Stephenson confirms that there is a large component of social psychology in the rise of these collectibles. “There is definitely a fun, even childish feel to collecting NFT,” he says. "And showing them to your friends, collecting the rare ones ... is definitely part of the appeal."
This expert believes that the success of NFT collectibles depends on the economy of attention.
And nobody represents it better in the
online
environment
than social networks.
Stephenson's profile picture on Twitter is of a monkey with a funny gesture.
It is easy to recognize one of the 10,000 avatars of the Bored Ape Yacht Club.
It was a gift, he acknowledges.
"That's why he has a birthday hat."
Stephenson, like many others, has joined the party.
And this, for now, seems far from over.
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