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NFTs drive sales of contemporary art to record £2.7bn | The art market


Contemporary art auctions rebounded to an all-time high of $2.7bn over the past year, boosted by online sales and the arrival of digital art in the form of “NFTs”, according to an annual report by Artprice.

Having seen sales collapse by a third in the previous year because of the initial crisis caused by the pandemic, sales soared between June 2020 and June 2021 as auctioneers quickly adopted a more online approach.

“Photography and prints have been particularly successful in this new online environment and in 2021, we have seen the sensational arrival of completely dematerialised artworks, the famous NFTs,” said the Artprice CEO, Thierry Ehrmann, in a foreword to the report.

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What are non-fungible tokens (NFTs)?

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Non-fungible tokens, known as NFTs, are electronic identifiers confirming a digital collectible is real by recording the details on a digital ledger or database known as a blockchain. The tokens have swept the online collecting world and are an offshoot of the boom in cryptocurrencies.

In economics, fungible means an item is interchangeable, like cash, where one £10 note is worth the same as another £10 note and can be exchanged for it without losing any value. Non-fungible tokens however are unique, and they are used to prove that an item is one of a kind and are aimed at solving a problem central to digital collectibles: how to claim ownership of something that can be easily and endlessly duplicated.

Musician and artist Grimes sold a collection of digital artworks for almost $6m (£4.3m) using the technology, while Jack Dorsey, the Twitter CEO, put his first ever tweet – “just setting up my twttr” – up for online auction as an NFT, with bids reaching as high as $2.5m.

But while the very technology of NFTs prevents them from being duplicated without permission, there’s nothing inherent to the sector that controls who can make an NFT in the first place – a fact that has caused dismay to some artists, who have found their work ending up in the “control” of people who had nothing to do with its creation.

There has also been criticism of the environmental impact caused by the computer processing power needed to validate the blockchain, a charge also levelled at cryptocurrencies.

Photograph: Andre M Chang/Rex Features

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NFTs, or “non-fungible tokens”, allow people to buy the rights to online art, including images, animation or even tweets.

In March, the US artist Beeple sold an NFT of his digital artwork Everydays: The First 5,000 Days for $69.3m (£51m) to an Indian blockchain entrepreneur – the third-highest price achieved by a living artist.

Christie’s said 22 million people, nearly 60% under the age of 40, logged in to the sale, the first public auction of an NFT.

NFTs accounted for a third of online sales, and 2% of the overall art market.

Banksy work is burned
Banksy’s work Morons was burned and sold as an NFT for $380,000. Photograph: Burnt Banksy

Banksy got in on the game shortly afterwards, selling an NFT of his work Morons, which featured an auctioneer selling a painting with the inscription: “I can’t believe you morons actually buy this shit”, for $380,000 (£280,000).

But Artprice said another key driver of growth was the emergence of the Asian market, with Hong Kong establishing itself as the contemporary art world’s second city after New York.

China beat the US for auction turnover, taking 40% of sales to America’s 32%. Britain was in third place with 16%.

“In effect, Hong Kong is now playing an accelerator role for the most prominent young western artists and it is establishing itself as New York’s primary competitor,” said Ehrmann.

The highest-selling contemporary artist remains Jean-Michel Basquiat, who died in 1988 but generated $93.1m in sales over the past year.

Beeple comes in second thanks to his landmark NFT sale.

But the third place is also surprising: 68-year-old Chinese artist Chen Danqing, who has lived in the US since the 1980s, who was propelled by a $25.2m sale in Beijing for his oil painting Shepherds in June, a record for Chinese art.

In terms of volume, the most popular artist is 3D artist Kaws, who is collected by pop stars including Justin Bieber and Pharrell Williams.

Kaws sold 1,682 works over the year, just ahead of another pop star favourite, Takashi Murakami, who has frequently worked with Billie Eilish and sold 1,591 lots.

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