Nearly every industry in today’s society has adopted a digital ecosystem, and the art world is no different. Creativity may stem from the mind, but innovative digital elements have allowed artists to expand their craft and explore an entirely new medium, as showcased in the burgeoning NFT digital art market.
Within only a year, the NFT art market size grew $41 billion. From Beeple’s record-breaking Sotheby’s sale to creator-endorsed items, the recognition and popularity of NFTs have shaken the community. Considering the force NFTs had in such a short amount of time, it’s reasonable to question the genuineness of the hype, but recent reports show that NFTs are here to stay, and evolve. Investment bank Jefferies lifted its NFT market-cap prediction to more than $35 billion for 2022 and estimates the market will reach beyond $80 billion by the year 2025.
NFT artwork sales are also through the roof — collectors spent $100 million more on NFTs in 2021 than the previous year. Much of this can be credited to the fortunate winner of Beeple’s NFT Everydays: The First 5,000 Days (2021) for $69 million. That sale alone has set a strong stage for the future of NFTs, inspiring auction houses, digital marketplaces and even museums to follow suit.
The Art Newspaper sat down with various experts who offered insights into NFT crypto art market predictions for the upcoming year with dominating optimism. Guillaume Cerutti of Christie’s expects the NFT community and the conventional art world to continue weaving together to broaden the market. Art Basel director Marc Spiegler’s perspective falls in line, sharing, “The NFT space will become more interesting — mainly from a conceptual rather than aesthetic perspective.”
Other experts commented on what’s driving the modernized digital community, driving up the NFT art market size, specifically by region. Co-founder of Art Intelligence Global, Yuki Terase, shares that NFTs will “revolutionize the way we consume, experience and share art, and this new ecosystem will be largely shaped and driven by new players in the market — strongly led by young Asian collectors.”
According to Anders Petterson of ArtTactic, that force will be accompanied by the U.S. market which is responsible for just over half of the top auction house sales in 2021. Petterson adds that this growth within the U.S. is motivated by “pent-up demand, asset diversification and a generational shift in the art market,” which will carry on through 2022, especially with the upsurge of NFT marketplace artists.
Timing could easily be a factor in the rapid growth as well. As NFT Culture points out, after the pandemic forced a slew of galleries to close their doors and devastatingly decreased global art sales, buyers looked toward NFT art marketplaces and apps, eagerly seeking new channels to “acquire art and continue to shift their purchasing power to avenues that function well.”
Just as it is within the traditional art market, the majority of the money within the NFT art market is only stretched across a handful of people: a small percentage of affluent collectors hold many of the expensive artworks in the world. Where the NFT digital art market differs is in the expansion of creators, as it opens up a platform that creators worldwide can access and enables new forms of ownership and experiences with art.
George Monaghan remarks, “It’s funny that people claim to be mystified by NFTs when we already have the art market. The two are perfectly analogue: assets with no functional value traded at massive prices because they are unique items and worthwhile investments.” So, if you’re thinking of investing in NFT marketplace artwork, you should ask yourself the same questions you would prior to investing in the conventional art market.
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