Felix Xu began his NFT art collection with the purchase of a Chromie Squiggle, which was created by an algorithmic. Xu, a 29-year-old Chinese technology professional, now owns over 3,000 blockchain-based collectables. However, he has a hole in his cryptocurrency wallet that he would want to fill with actual artworks. His cost estimate is approaching $500,000, and he is already on the waiting list for in-demand creatives with paint and moving brushes, such as Zhang Zipiao.
So, in December, Xu, the founder and Chief executive Officer of startup Arpa and Bella Protocol, wandered around the Art Basel Miami Beach gallery booths, where traders from David Zwirner and Pace Gallery sought to sway his ear toward the contemporary art marketplace. They were seeking sales, whereas he was seeking learning.
"I was genuinely impressed by all the works of art," Xu said in a conversation, praising the show for broadening his interest from blue-chip modernists like Picasso to contemporary artists like Nigel Cooke and Jessie Makinson.
Xu is one of an expanding number of non-fungible token collectors eager to spend their cryptocurrencies on something quantifiable: a conventional art collection, beginning with the Renqian Yang painting he purchased in January.
Critics have sneered at the idea of marriage among both NFTs and the art industry. However, catering to the preferences of the symmetric encryption nouveau riche has become the frantic obsession of the commercial art world, which is realigning itself around all these collectors editions nearly a year after artists such as Beeple and Pak sold NFTs for tens of millions of dollars, encouraging the customarily technophobic art industry to venture into the metaverse.
After all, among the NFT enthusiasts walking Miami Art Week was Pete D, an anonymous crypto collector who purchased a 1950 tapestry by Le Corbusier from Boccara Art before blogging about "the strange and lovely world of top-tier physical art buying." Rahilla Zafar, who is based in Austin, is another. Her earliest fair acquisition was a picture by Matthew F Fisher from OCHI Gallery.
"The gallery owner claimed he was just an excellent artist whose paintings are increasing in value," said Zafar, a documentary filmmaker and blockchain business consultant. She has subsequently added two dozen pieces for her walls to the costly NFT collectables BoredApes and CryptoPunks, where evidence of ownership is maintained on the Ethereum blockchain.
Art galleries are going farther, embracing the technology that challenges their economic model, even as they pursue collectors from the metaverse. Many people have made investments in digital platforms. According to industry analysts, it is a chance for distributors to minimise incentives for their artists to bypass them as intermediaries and sell their work totally independent.
"The art world is continuously seeking for new territories to grow through, and the NFT world is like the ultimate gateway drug," Natasha Degen, chair of art market studies at the Fashion Institute of Technology, said. "Anyone participating in a turbulent and risky market like NFTs would have an easy transfer to the art world, where those same dynamics exist."
Sotheby's just started offering NFTs last year, but the virtual currencies produced $100 million in sales, according to the business, with 78% of NFT bidders being new customers – and more than half of those tenderers being under 40. "In the last three or four months, we've observed a growing interest in tangible art from NFT buyers," said the gallery's director. Charles Stewart, the auction house's CEO, explained that new collectors want the perspective that art history could provide for their digitized works.
Christie's, a rival, claims to have made $150 million in NFT transactions. Both auction houses are doubling in on the cryptocurrency market. Sotheby's, for example, has contributed $20 million to the NFT marketplace developer Mojito, which assisted the auction house in developing its own virtual gallery last year.
Justin Sun, the Internet mogul and inventor of the cryptocurrency platform TRON, was an early conversion from the NFT group, purchasing a $20 million Picasso at a Christie's auction last year. In November, he resumed his Sotheby's purchasing frenzy, paying $78.4 million for a 1947 Giacometti sculpture, 'Le Nez.'
Sun's art consultant, Sydney Xiong, conducted the deal over the telephone. Xiong has assisted the cryptocurrency millionaire in putting together a collection of conventional and NFT masterpieces for his APENFT Foundation, a platform she claims will bridge the gap between both the art world and the metaverse.
"He didn't know anything about Giacometti before the auction," Xiong stated, adding that the couple debated the artist for three hours before putting a bid. "I attempted to instruct him and inform him of how I felt." The APENFT Foundation established a $100 million fund in November to nurture the skills of graphical artists. The organisation currently employs more than 30 employees and wants to showcase its physical and digital collections in Shanghai. According to Xiong, the organization is now exploring minting Giacometti and Picasso NFTs on the TRON network, another cryptocurrency platform founded by Sun.
Sun announced in December that he will leave TRON to promote blockchain and cryptocurrency adoption in Latin America.
Many creators have entered the metaverse with work that combines virtual and analogue components. The stated purpose is frequently to transform the crypto-rich into art aficionados. Artist Tom Sachs has abandoned his furniture design and museum displays in favour of a pet art project called 'Rocket Factory,' in which consumers may acquire three distinct stages of a digital NFT rocket ship; once the ship pieces are connected, the creator introduces an actual duplicate into the sky. After being retrieved, the replica is mailed to its owner in a special display box, and the online version is updated with launch metadata.
Sachs characterized the idea as transforming his workshop into a "trans-dimensional manufacturing facility" where 1,000 rockets are being built. He has sold hundreds of rockets to antique dealers and is working at breakneck speed to complete everything.
He has also attempted to persuade dealers and organisations to use the new technology. In November, the artist assisted the Los Angeles County Organization of Art in the procurement of a "Rocket Factory" NFT, leading the museum through the process.
"We held their hands and taught them everything before launching the rocket on the LACMA grounds," Sachs explained. The institution is in the process of determining how to preserve the NFT and the rocket in the future.