NFT Art: Art on the Blockchain
NFT Art and traditional art are both part of a thriving art market. Art is defined as: “the making of objects, images, music, etc. that are beautiful or that express feelings.” Traditional art has been around for thousands of years. The famous Lascaux Cave paintings in Montignac, France were created by our ancient ancestors approximately 17,000 years-ago, and we have not stopped creating art since. Traditional art continues to be a very lucrative market. In 2021, the traditional art market had sales of approximately $50 billion.
The traditional art market is not going away. Yet, as we enter the second half of 2022 where technology is a constant part of our lives, it seems fitting that a new art market would take hold. Art that exists on the blockchain. NFT Art. As of July 2022, NFT sales for the year are already at $42 billion, nearly $2 billion more than in the entirety of 2021. However, the crypto markets have taken a huge hit during the crypto winter of 2022, and many are announcing the death of all things crypto.
Here, we examine the strength of the NFT Art Market and look prospectively, as the winds of inflation and recession harshly hit the world’s economies.
Why Art Anyway?
The collection of art fulfills multiple purposes. There is something innate in humans to collect beautiful things. Many of us enjoy paintings, statues and other works of art that are aesthetically appealing. Humans have been collecting things for at least one hundred thousand years. Also, art might evoke certain feelings and emotions from the viewer.
As you may see from the chart above, traditional art sales have been consistently above $50 billion per year every year since 2007, except for the recession year of 2009. In fact, the “Great Recession of 2008” lasted about 18 months, and sure enough, the art market bounched back to over $57 billion in sales in 2010, and over $64 billion in 2011. This is an unbelievably consistent and liquid market. Indeed, even with a downturn in a recession year, the quick bounce back was impressive.
Above, we the see the top 12 most expensive pieces of traditional art ever sold. All of these pieces were sold after April of 2011. Two of the top twelve pieces were sold in 2022. Rembrandt’s “The Standard Bearer” sold for $198 million in February 2022. In May of 2022, Andy Warhol’s “Shot Sage Blue Marilyn” sold for $195 million. The traditional art market continues to be extremely liquid and sustainable. Indeed, the traditional art market has survived every recession. But what can the resiliency of the traditional art market teach us when we look at the NFT Art market?
NFT Art: Trend or Here to Stay
The NFT Art market peaked in January 2022 with sales topping $10 billion. Sales in June of 2022 peaked just over $1 billion. These numbers certainly suggest a downtrend in the NFT Art market. Yet, this downward movement has not been occurring in isolation. There have been numerous outside factors that have negatively impacted the NFT Art Market.
First, that the traditional art market goes through bull and bear cycles, but it is a strong market that has survived for hundreds of years. The reason the traditional art market has survived is because of the art itself.
Second, the crypto winter of 2022 has caused all cryptocurriences to fall dramatically from their all-time high prices. NFTs are priced in crypto, so this has of course negatively impacted the price of NFT Art. But the rumors of the death of crypto have been greatly exaggerated. The macro-economic news has had a negative impact on the entire economy. Nothing has been insulated from the inflationary and recession news. But the worst of the crypto winter may be behind us. Bitcoin has rallied from its recent lows of $18K to stay strongly above its support at $20K.
Third, in 2021 venture capital investment in cryptocurrency and blockchain companies rose to over $27 billion. This is an astronomical increase over the past 10 years, and just one sign that “big money” is heavily invested in the future of cryptocurrency. A fact that cannot be discarded as a distinguishing factor between our current market and the bear markets of yesterday. Further, institutions like Goldman Sach and Bank of America have changed their perspective on cryptocurrency since the bear markets in the earlier part of the 21st Century. Indeed, Bank of America recently stated that bitcoin and other digital assets are simply too big to ignore. This was not the case the in 2013. These and other factors seem to distinguish the Crypto Winter of 2022 versus the other bear markets that have come before.
Art With Utility
The traditional art market has survived for hundreds of years. This market has survived, in part, because owning certain pieces of art is a status symbol for the wealthy and well-connected. Now, with social media everywhere, this same wealthy individual can make their social media profile picture a one-of-a-kind piece of NFT art. Thereby proclaiming their status to millions of people. These types of NFTs are known of profile picture NFTs, or PFP NFTs. As the world becomes more and more digital, NFT PFP will become even more prevalent.
NFT Art does what traditional art does and then builds upon it. NFT Art can be aesthetically beautiful. It can express feelings and emotions. In other words, NFT Art can do exactly what traditional art can do. But NFT Art can do more than traditional art. Due to the blockchain technology that NFTs are built upon, NFT Art can provide utility and benefits to their owners. The utility and benefits that NFTs provide are not available to the traditional art owner.
And We Thank You for a Real Good Time!
Thank you for reading our blog post. Continue to check us out for more information and resources on all things NFTs – including our own NFT project, Awk Monks! Also, don’t forget to check out The Ultimate NFT Monkey Guide for all things NFT Monkey related. It’s a great resource rich in information.