Art snobs may loathe NFTs, deeming them bastardizations of a lineage defined by Da Vinci, Michelangelo, Picasso and Rothko. But don’t tell that to the auctioneers at Christie’s and Sotheby’s.
Beginning last Thursday, Sotheby’s has been conducting a weeklong auction of the “Natively Digital: A Curated NFT Sale” collection. It’s a diverse selection of non-fungible tokens ranging from an ultra-rare Alien CryptoPunk (currently bidding at $480k) to the world’s first publicly available “intelligent, self-learning iNFT” (currently bidding at $42k).
Sotheby’s is playing catch-up with Christie’s, which upended the art world in March when it sold the NFT of Beeple’s “Everydays: The First 5000 Days,” for a whopping hammer price of $69M. Now with both auction houses racing to offer up the most desirable NFTs, naysayers may have to swallow their outrage and accept a dynamic new chapter in the history of art.
That Sotheby’s and Christie’s are embracing art created on the Ethereum blockchain is one of the richer ironies of the DeFi story. Since the 18th century, these august houses have dueled for supremacy in the rarified world of fine art. Along the way, the duopoly has become the gatekeeper for “high art” and turned it into an industry that fetches hundreds of millions of dollars for a single work by De Kooning or Cezanne. It’s a one-percenter’s playground.
Christie’s and Sotheby’s pocket hefty seller’s fees for their services, and additional performance bonuses if the hammer price attracts better-than-expected bids. If that all feels very TradFi, note that each house is owned by a French billionaire — telecom mogul Patrick Drahi controls Sotheby’s and Francois Pinault’s luxury goods concern has run Christie’s since 1998.
In contrast, NFTs are a vivid demonstration of DeFi’s decentralized, non-hierarchical structure. Forget the ultra-exclusive gallery culture and black-tie charity auctions. In this space, artists connect directly with buyers on wide-open online platforms, exhibit freely wherever they like, and form communities with kindred spirits, no middleman required.
Then again, the NFT market does thrive on the same breed of hype that has fueled art markets for ages. For instance, a 2013 article on art market manipulation in Quartz outlined how high-end galleries oftentimes pre-sell work to select “taste-maker” buyers, like celebrities, in order to make artists seem more in-demand.
And you cannot overstate the clout that comes with having the imprimatur of the world’s most influential auction houses. Just look at how auctions and hype combined to transform the late Jean-Michel Basquiat from a street artist into a paragon of high art with paintings worth millions (Banksy comes to mind, too).
Three Big Sales
Moreover, the sums collectors are willing to spend on NFTs speak for themselves. Before Beeple exploded on the scene, awareness of NFTs had been largely confined to the outer rim of the crypto galaxy. Sure, The New York Times had written about $140k CryptoKitty sales in 2018, but by and large, only self-declared “degens” were clamoring for Larva Labs’ 24 x 24 pixel CryptoPunks.
And Christie’s had recognized as far back as 2018 that blockchain technology was poised to create new opportunities in the creation, exhibition, and distribution of art. That July, it hosted an Art + Tech Summit at its headquarters in London exploring the intersection of art and DLT. It wasn’t long before the venerable auction house took the plunge on digital art sales, and eventually NFTs.
In December 2020, Nifty Gateway auctioned 20 of Beeple’s 1-of-1 edition NFTs from the “Beeple: Everydays: The 2020 Collection” to the pseudonymous collector MetaKovan for $2.2M. In January, the $176k sale of a rare Ape CryptoPunk (only 24 Ape Punks exist) broke the record for the highest price paid for a single NFT.
Yet the real game-changer was Christie’s auction of Beeple’s “Everydays: The First 5000 Days.” As the third highest sale of work by a living artist, it vaulted Beeple into the ranks of David Hockney and Jeff Koons. As “the first purely digital artwork (NFT) ever offered at Christie’s,” it also marked the pivotal moment when a top auction house recognized NFTs as a legitimate form of “high-art.”
The NFT was also purchased by MetaKovan, but other bidders included Justin Sun, the founder of the decentralized blockchain ecosystem TRON.
Meanwhile, Sotheby’s scrambled to get into the NFT game, too. The auction house collaborated with Nifty Gateway to launch digital artist Pak’s “The Fungible Collection” in April. The collection, which offered both single edition and open edition NFTs examining “our understanding of value”, generated $16.8M in sales across three days, making it the No. 3 NFT sale on record.
This week Sotheby’s is hoping to make a splash with the “Natively Digital: A Curated NFT Sale” collection. The collection is curated by Robert Alice, the London-based artist behind the crypto-inspired “Portraits of a Mind” project, which consists of 40 giant paintings incorporating Bitcoin’s source code.
Sotheby’s “Natively Digital” collection is intended to illustrate the breadth of the NFT medium, spanning 28 lots featuring everything from NFT photography to NFT pixel art. Sotheby’s has also opened a digital gallery in the Metaverse game Decentraland, and a physical display featuring the “Natively Digital” art in their in-person galleries, blurring boundaries between physical and digital displays.
Stimulating Mainstream Interest
Still, the two auction houses’ forays into NFTs haven’t been entirely smooth sailing. In May, Christie’s laid claim to the second highest NFT sale, with their auction of a 9 CryptoPunk lot that included an Alien Punk (only 9 Alien Punks exist) which closed for just under $17M. Christie’s also created an in-person exhibit, placing tiny print-outs of the Punks in their New York display room. The auction drew the ire of some members of the CryptoPunk community, including gmoney, the pseudonymous owner of the aforementioned Ape Punk, who felt that Christie’s display was disrespectful. Noah Davis, the Christie’s curator behind the Beeple auction, issued an apology to the CryptoPunk community in their Discord channel.
Moreover, both Christie’s and Sotheby’s approach to NFTs is still a bit awkward. On the one hand they are embracing and supporting the new medium, and are stimulating mainstream interest in NFTs. That’s brought tons of non-crypto native artists into the space. Some cypto-natives see value in the traditional auction houses, too, as evidenced by the fact that two CryptoPunk Alien holders have decided to sell through this model.
On the other hand, they are trying to balance the decentralized ethos of NFTs with the restrictions of the traditional art economy. For example, both Christie’s and Sotheby’s accept cryptocurrency, in the form of either BTC or ETH, for NFT sales. But those payments have to be sent from centralized wallets hosted by Coinbase, Fidelity, Gemini Trust Company, or Paxos. Payment from DeFi wallets is not accepted.
Out of this foment, a strange, symbiotic relationship is emerging between two institutions that epitomize legacy and the trailblazers of the NFT frontier. Christie’s and Sotheby’s have obtained a new way to reach fresh audiences, while NFT communities benefit from the “legitimacy” — and auction machine — offered by the old guard.
Not everyone is happy with this state of affairs. Waldemar Januszczak, the respected art critic of The Sunday Times of London, has decried NFTs as a “bad art” and said he is “in shock” about the $69 million Everydays sale. Even though David Hockney has been using an iPad to make art for years, the 83-year-old English master called NFTs “silly little things” and the domain of “international crooks and swindlers.
And yet one can’t help but think that Marcel Duchamp and Andy Warhol, to name just two iconoclasts, would have loved the ubiquitous nature of NFTs. Warhol, who enjoyed screen-printing replicated images, might have been especially tickled to learn that his estate made an NFT of his Campbell’s Soup Can, fetching over $1.1M in a Christie’s auction.