Category: Art Investment

O Hype por trás dos NFTs e Crypto no Mundo das Artes

Deixou de ser novidade, mas, no entanto não deixou de ser relevante a marca que a arte digital tem vindo a deixar no sector da cultura nos últimos meses. Por consequência de uma pandemia ou por consequência de progressos tecnológicos, – se em Janeiro poucas eram as pessoas que tinham conhecimento dos NFT’s e crypto art, agora, uns meses depois, é praticamente impossível ouvir os profissionais da indústria das artes falar de outra coisa. 

Mas afinal o que são NFT’s? E por quanto estão ser vendidos? Gerem muito dinheiro e vale a pena investir? Ou serão NFT’s nada mais que uma moda passageira?

O que são NFT’s?

NFT é o diminutivo de Non Fungible Token – Token Não Fungível, e funciona como registo ou prova de posse legal de um objecto digital. Estes objectos digitais podem ser qualquer tipo de media, incluindo mas não limitado a pintura, imagens, videos, música, gifs, jogos, texto e até mesmo memes. Se no passado ou aliás, – até há pouco tempo o procedimento mais tradicional de autenticação de objetos e produtos artísticos estava nas mãos de galerias e museus de arte, a chegada abrupta dos NFT’s tornou este processo burocrático mais simples e acessível, actuando como um museu ao passar certificados de autenticação e evidência de posse legal em objetos artísticos na esfera digital.

Como funcionam?

Em 2008, Satoshi Nakamoto, o criador da bitcoin, introduziu um novo método de verificação e de autenticidade de produtos, – agora conhecido por blockchains. As blockchains, no início da sua criação, eram usadas para registar e documentar transações financeiras. Hoje, as blockchain podem ser usadas para qualquer tipo de registo de transação. Desde obras de arte colecionáveis a novos métodos de contabilidade, quase qualquer tipo de transação é possível dentro das blockchain.

No que toca a objetos artísticos, um dos mais importantes aspetos das blockchains é serem praticamente impossíveis de alterar. Um artista pode obter toda a sua documentação e registo de autenticidade de um objeto artístico usando, por exemplo, plataformas de NFT’s, que tornam essas evidências de autenticidade inalteráveis. Estes documentos podem depois ser vendidos ou até leiloados, passando de artistas para colecionadores de arte, o que torna o valor de venda objetos de arte digitais muito alto.

Porquê pagar por um NFT quando posso consumir Arte Digital gratuitamente?

Enquanto Consultora de Arte, esta questão tem aparecido inúmeras vezes nos últimos tempos… Podemos observar um quadro do Picasso de graça, num museu, numa galeria ou até mesmo na internet. No entanto, não faz de ti o dono desse quadro. E até podes ter a melhor réplica de um Picasso mas nunca a vais poder vender sendo o dono verdadeiro. O certificado de autenticação acaba por ser mais importante do que a obra artística, assim, pagar por um Nft é o mesmo que adquirir um quadro original com o seu certificado de autenticidade incluido.

NFT’s podem ser uma nova forma de colecionar arte?

A resposta é sim, começa a haver um interesse por parte do público no geral, em relação aos NFT’s. Sobretudo porque esta rede permite tornar newbies em colecionadores de arte com mais facilidade, ou simplesmente ajudar a quebrar a barreira do primeiro investimento em arte. No entanto, no mercado da arte digital, quando colecionadores compram estes “token’s não fungíveis” estão a comprar na realidade, objectos que não podem ser reproduzidos ou replicados. Comprar um NFT’s é essencialmente comprar uma edição original e limitada de um objeto artístico. Contudo, pode acontecer em alguns casos a obra ter associadas referências externas a outra obra. Por muitas que sejam as razões pelas quais haja uma apreensão relativa a este conceito de se ser proprietário de algo digital, para muitos colecionadores NFT’s são ainda muito raros e por isso, o seu valor líquido pode chegar a ser muito alto com grande potencial de lucro.

A moda dos NFT’s

O rápido crescimento e aderência a esta esfera digital de produtos artísticos trouxe consigo o levantamento de algumas questões e preocupações… O que é que vai acontecer aos NFT’s num período pós-pandemia?

Por um lado, o colecionador Pablo Rodriguez-Fraile (que vendeu um dos primeiro’s NFT’s do artista Beeple por 6.6M $ na Christie’s) acha que os NFT’s “estão aqui para ficar”, explicou de forma convicta, “sim, estamos a passar por um período de hype e de certeza que o valor das obras compradas irá descer, mas os nfts’s seguramente vão continuar a fazer parte do nosso sistema económico”.

Para Cock Foster, – fundador da Nifty Gateway, o retorno à normalidade oferece mais oportunidades e possibilidades do que propriamente obstáculos e repercussões; as galerias e os grandes museus de arte vão ter a capacidade de propor metodologias novas para experienciar arte digital mas num formato tradicional, para além de um espaço virtual. “Arte digital consegue ser imensamente imersiva” Foster explica ainda, “E por isso acho que conseguimos criar experiências físicas muito interessantes usando arte digital.” 

Previsões para o Futuro

A Nifty Gateway pode estar ainda a um longa distância do seu objetivo de conseguir ter 1 Bilião de colecionadores ativos na plataforma, no entanto, o crescimento do site revelou um interesse muito focado em crypto art por parte dos consumidores e colecionadores. Em Março de 2021, a plataforma registou transações mensais com o valor de 30,000$. Em Abril, o valor subiu para 75 Milhões, de acordo com uma declaração de Cork Foster.

Este salto gigante claramente que coincide com a maior adversidade económica e social do momento: A pandemia Covid-19… Com todas as galerias e leiloeiras de arte encerradas pelo mundo, e com cada vez mais gente a ter que aderir ao digital como único recurso de consumo de produtos e serviços, os NFT’s aproveitaram esta interrupção do mercado das artes e abriram as portas para um novo tipo de consumo para colecionadores, entusiastas das artes e até mesmo para artistas.

NFT’s e o Mercado das Artes

A Christie’s não é uma leiloeira novata no que toca a aderência às mais recentes tecnologias. A empresa tem organizado eventos e conferencias sobre tecnologia e arte desde 2018. Nessa altura, proclamava-se uma leiloeira percursora ao ter conseguido vender a primeira obra de arte criada por um algoritmo. O retrato de Edmond Belamy, criado por um algoritmo de inteligência artificial, vendido por 40 vezes a estimativa do valor proposto.

O mais recente leilão da Christie’s é a penas a ponta do icebergue relativamente ao mercado dos NFT’s. Coindesk, uma revista de notícias sobre digital currencies, prevê que o valor dos NFT’s irá rondar os 250$ Milhões nos próximos tempos. Plataformas com a Nifty, Opensea e SuperRare que consistem em transações digitais de bens e produtos, tem vindo a expandir-se a comercializar-se com grande rapidez, tornando a comunidade de colecionadores cada vez maior com cada vez mais items por colecionar.

NFT’s são úteis no mercado de arte digital pois permitem solicitar a autenticidade de uma obra e o quão limitada é, apesar da facilidade que é reproduzir e plagiar obras de arte digitais. Os artistas e as galerias tentam criar e reivindicar a singularidade de uma obra usando edições limitadas, cirando certificados a diferença é que os NFT’s rapidamente automatizam esse processo. Como já foi dito, NFT’s documento e registam a posse legal de um objeto usando uma blockchain, que é uma alternativa descentralizada de uma base de dados comum. Ao terem sido programadas por criptografia em comunidades de networks e Coding especificas, as blockchain resistem a qualquer tipo de hacking, plágio, reprodução e cópia de qualquer tipo de objeto, – daí serem tão importantes no arquivo deste tipo de registo.

As grandes leiloeiras de arte ainda estão a tentar acompanhar este novo nicho no mercado da arte. A Sotheby’s já lançou o sei primeiro leilão de NFT’s, um leilão que durou 3 dias e que apenas constou com a venda de obras do artista de crypto Pak. O primeiro dia de leilão, angariou uns exurbitantes 10$ Milhões. A Phillip’s ainda está por leiloar Nft’s pela primeira vez.

Quando a obra “Everydays” do Beeple foi vendida e reconhecida como “o primeiro objeto artístico puramente digital”, a Christie’s auto destacou-se na vanguarda do mundo das artes… Uma declaração exagerada, talvez?

NFT’s e a Indústria dos Museus

No auge da relevância dos NFT’s, atualmente existem mais questões  e preocupações do que existem respostas sobre o impacto que os NFT’s tem nos museus e galerias de arte. O tipo de discurso que tem circulado mais relativo aos NFT’s é, sem duvida, um discurso sobre o potencial económico, social e cultural associado ao mercado da arte digital. Contudo, a tecnologia trás consigo, por exemplo, consequências ambientais e obstáculos para a eficiência dos nossos ecossistemas. 

Os custos ambientais dos NFT’s

A questão do impacto ambiental é de longe a mais pertinente. “A intensa procura de recursos que possam ser adequados à criação de uma ideia de singularidade e escassez de objetos de arte digital,  faz com que seja difícil para os museus encontrarem os meios mais corretos e sustentáveis, e, a ideia que os NFT’s transmitem ao parecerem ser verdes, ecológicos e sustentáveis é longe da verdade e os museus tem que parar para refletir antes de entrarem neste tipo de mercado.” – Holly Shen, Diretora do Museu de Art de San Jose, nos Estados Unidos.

Produção (Minting) de NFT’s para Museums

A ideia dos museus produzirem os seus próprios objetos artísticos começou no início do ano, quando um coletivo chamado Global Art Museum registou um conjunto de NFT’s a partir das coleções de museus de acesso público como o Rijksmuseum na Holanda e o Art Institue of Chicago nos Estados Unidos, fazendo disso uma experiência social. Enquanto instituições públicas, tradicionais e sem fins lucrativos, os museus não precisam necessariamente de aderir mercado dos NFT’s, mas existe um bom potencial para lucrar. A colaboração com artistas em NFT’s em nome da caridade é uma opção, tal como pedir a artistas para produzirem edições limitadas de obras de arte ou obras colecionáveis em nome do museu. Mas, mais simples ainda, seria abrir uma carteira de crypto e deixar as pessoas doarem o que quisessem…

NFT’s criam mais oportunidades?

Limitações e problemáticas relativas ao acesso e à inclusão começaram a passar do modelo tradicional para o modelo digital desde os anos 60. As práticas artísticas e os comportamentos culturais muitas vezes imitam as normas e os valores que as instituições impõem. Desse modo, questões de diversidade, representação e igualdade continuam a prevalecer no mercado das artes e em particular e sem excepção na esfera dos NFT’s. No entanto, a ausência de estabelecimentos institucionais cria de certa forma um tipo de ambiente mais livre e justo para artistas e entusiastas.

Galerias e Arte Digital

Artistas que nunca trabalharam com NFT’s estão a começar a fazê-lo, sem a ajuda e apoio de galerias que têm pouco acesso à comunidade de arte crypto, mas com ajuda de especialistas do mercado. O presidente da plataforma de NFT’s MakerPlace, Daniel Chu, prevê que empresas como as dele, ao longo do tempo, vão acabar por desmistificar e abandonar as normas das instituições tradicionais. “Se existe alguma indicação de exemplos anteriores” diz Chu, “Coisas que são assimiladas por um movimento digital tendem a deixar de existir”.

Mas isso está longe de acontecer… As plataformas de NFT’s continuam com dificuldades em promover e curar obras de arte para serem leiloadas da mesma forma organizada e especializada que as galerias e leiloeiras tradicionais fazem.  A ideia principal na indústria das artes é que o objecto em si seja determinado pelo conceito que existe nele inerente e não determinado pelo valor monetário. Qualquer pessoa consegue vender um NFT em qualquer plataforma adequada, mas visitar estes sites é o equivalente a navegar por um oceano de imagens completamente indiferenciadas.

No entanto, o mundo dos NFT’s não está a ficar para trás. Em Março, Casey Reas um artista e curador em Los Angels, inaugurou um espaço chamado Feral File. Reas seleciona pequenos grupos de artistas de NFT’s que abordam os mesmos temas e que trabalham com as mesmas práticas, para mais tarde apresentar as obras produzidas numa exposição virtual e vender as edições limitadas como NFT’s. É um meio-termo entre as plataformas de arte digital e as galerias tradicionais; adoptar a tecnologia e o sistema económico dos NFT’s com o rigor, expertise e conhecimento que as instituições tradicionais têm.

Surpreendentemente, cada vez mais artistas estão a recorrrer às tradicionais casas de leilões para vender novas obras. Instituições como a Christie’s ou a Sotheby’s ficam com comissões mais baixas do que as grandes galerias que normalmente controlam o mercado primário, e as suas marcas carregam mais capital cultural. Estas instituições são também especialistas em gerar interesse à volta dos seus eventos. “Há menos contra-partidas em trabalhar com uma casa de leilões”, disse Robert Alice, o primeiro artista NFT da Christie’s. “Está-se a tornar óbvio que para quem quer ganhar exposição, as casas de leilões podem ser muito melhores que as galerias.”

Arte Digital vale mais do que Arte Tradicional?

Em resposta ao isolamento social e à ausência de consumo de produtos e experiências culturais de forma presencial, surgiu este novo sistema de consumo: o consumo liquido que essencialmente ultrapassa o universo do consumo de objetos materiais. O conceito do consumo liquido reforça a desmaterialização de produtos culturais e experiências.

Porém, a ideia de que grandes colecionadores estão a pagar valores altíssimos por obras de arte que podem ser vistas e partilhadas de forma gratuita online não é assim tão simples… Alguns colecionadores de obras digitais afirmam investir em obras deste cariz não pela estética mas pelo trabalho que o artista teve ao criar o objeto em si. E sim, claro que a exclusividade da obra é sem dúvida o aspeto mais significante neste contexto de investimento. 

NFT’s são benéficos para os Artistas?

Muitos artistas visuais, depois de anos de criação de conteúdos digitais para grandes redes sociais, tais como Facebook e Instagram, por não terem conseguido obter virtualmente nenhum retorno monetário, juntaram-se, quase que por impulso, à moda dos NFT’s. Designers, Realizadores, Músicos, todos eles conseguem ver um futuro benéfico neste mercado; onde o processo criativo é redefinido pela forma como os objetos digitais são consumidos. Visto que agora é possível ser dono de/ vender obras de arte digitais. “Vamos ter tantos indivíduos de percursos e backgrounds diferentes a partilhar a sua arte, a criar novas ligações com outras pessoas e potencialmente fazer crescer as suas carreiras profissionais”. Diz Boykins, uma artista visual que costumava partilhar o seu trabalho gratuitamente nas redes sociais, “Os artistas investem imensas inúmeras horas do dia nos seus trabalhos,  vê-los serem recompensados de uma forma justa e digna, é muito reconfortante.”

O mercado dos NFT’s funciona de forma diferente. São os artistas, normalmente, que fazem parte do mundo das blockchains e da comunidade de crypto art, que usam as redes sociais como plataformas para fazer crescer as suas audiências e que conseguem vender os seus trabalhos diretamente a colecionadores usando plataformas específicas como MakersPlace e NiftyGateway. Estas plataformas ficam com aproximadamente 10% de comissão de cada venda feita, oferecendo ainda royalties e direitos de autor automaticamente a valores descritos pelos próprios artistas. De acordo com o artista de crypto art, Robert Alice, depois de três a quatro semanas, o artista faz mais dinheiro com a re-venda da sua obra do que quando a vendeu ao valor inicial.

O Potencial dos NFT’s

Os NFT’s permitem a criação de novos modelos empresariais, nunca antes imagináveis. Os artistas podem criar as suas próprias condições nos NFT’s, assegurando-se que têm direito a uma comissão em cada vende que é feita, implicando um grande beneficio de lucro pois o valor das obras vai subindo com cada compra. Até os jogadores de futebol têm usado tipos de contractos semelhantes aos que os artistas usam nos NFT’s, permitindo assim um aumento exponencial da sua comissão em cada venda e troca de equipa.

Novas plataformas de arte, como a Niio Art, por exemplo, demonstram uma grande simplicidade em adquirir NFT’s. Quando um consumidor compra um produto da plataforma, o produto é exposto num ecrã com uma nota que esclarece as questões de direitos de autor e de exclusividade, visto que NFT’s e blockchains garantem autenticidade.

Além disso, os NFT’s oferecem aos músicos o potencial de fornecer itens vantagens especiais aos seus fãs. E, no que diz respeito a artigos de desporto, entre 50% e 80% dos objetos são considerados falsos. Colocar estes objetos nos NFT’s com um registo de transações transparente e eficiente, pode resolver este tipo de problema de falsificação.

Mas, para além destas áreas, o potencial dos Nft’s vai bem mais longe, até porque este mercado muda completamente as regras de propriedade. As transações das quais a propriedade de algo muda de mãos , geralmente dependem de dezenas de intermediários para estabelecer o mínimo de confiança na transação, é importante trocar contratos e garantir que o dinheiro mude de mãos.

Haverá muitas outras melhorias nesta economia descentralizada que ainda não foram imaginadas. Será um tipo de mercado muito mais transparente e direto do que aquele a que estamos acostumados.

Como comprar NFT’s

Há uma variedade de plataformas nas quais podemos comprar e vender NFT’s: NiftyGateway, MakersPlace, OpenSea e Rarible são apenas algumas das muitas plataformas dedicadas à compra e venda desses tipos de objetos. Para aqueles que podem estar interessados ​​em obras colecionáveis ​​relacionadas com desporto e NBA, vejam o exemplo do NBA Top Shot – onde 230$ Milhões foram gastos apenas na troca e revenda de NFT’s.

Como criar e vender NFT’s

No caso de serem artistas, designers ou qualquer outro tipo de criador de artes visuais, podem fazer e transformar qualquer coisa que criem num NFT. O famoso Nyan Cat, sabem? Aquele gato em pixel art com um rasto de arco-íris? Sim, esse mesmo! O gato animado que voa no espaço com um arco-íris atras dele … O Nyan Cat foi vendido como um NFT por quase mais de meio milhão de dollars. A única coisa que precisam de fazer é inscreverem-se numa dessas plataformas, e o resto é quase magia por ser tudo tão simples, intuitivo e acessível.

O processo difere de site para site, obviamente, mas podem começar em plataformas como o Nifty Gateway, onde, basicamente é só necessário estar inscrito para criar um projeto que possa ser vendido como um NFT.

Conclusão

• Um NFT é essencialmente uma obra de arte digital sobre a qual se pode reivindicar posse.
• Os NFTs são uma forma mais fácil de vender e comprar trabalho autenticado, através da internet.
• Os NFTs permitem a qualquer pessoa ser dona de um determinado conteúdo digital, bem como dar aos vendedores e criadores um ambiente seguro e regulado para a venda das suas obras, facilitando o processo a alguém interessado em investir ou simplesmente em coleccionar obras.
• Os NFTs são úteis no mercado da arte digital uma vez que permitem reivindicações de autenticidade e exclusividade.
• Os NFTs reconstroem tanto o processo criativo do artista como a forma como o mundo pensa na arte, sendo agora pela primeira vez efectivamente possível ser “proprietário” de arte digital e vendê-la, permitindo que os artistas beneficiem da venda directa do seu próprio trabalho.
• Os NFTs criam a possibilidade de novos modelos de negócio. Os artistas podem anexar condições ao NFT que garantem que receberão uma determinada comissão cada vez que a obra for revendida, o que significa que irão beneficiar de qualquer aumento de valor da obra.
• Os NFTs podem ser altamente valorizados dependendo de quão “viral” ou “na moda” a obra estiver. Dada a sua “viralidade”, faz sentido que se entre nesta nova corrente o mais rápido possível, caso contrário, devido às flutuações económicas e do mercado, corre-se o risco de perder o impulso e com isso o valor da obra em que se esteja interessado.

It is not new that in the last couple of months, the Art World was been taken by storm – to say the least. If back in January no one in the Art World was aware of NFTs or crypto art, now, a couple of months later, we might as well consider it a miracle if we hear anyone important in the industry talk about anything else.
But, what exactly are NFTs? And for how much NFTs are currently being sold for? Is crypto art a new market or only a quick viral trend?

What are NFTs?

NFT is short for Non-Fungible Token which means the registration of ownership of a digital object. So, this can be any type of media including but not limited to art, videos, music, gifs, games, text and even memes. If in the past artists might have been provided with an authentic signature or their representative gallery has passed some sort of certificate to authenticate an artwork, NFTs work the same but only work in digital format. So, essentially, NFT’s work as digital Certificates of authenticity that helps to prove the authenticity and ownership of virtual goods.

How do NFT’s work?

In 2008 Satoshi Nakamoto, the creator of bitcoin – introduced a new method of verification and product authenticity, now known as the blockchain. Blockchains were historically used to record financial transactions, but they’re pretty malleable. These days, you can find everything from collectable games to new methods of finance – all living on blockchains.

The most important feature of blockchain used in Art is that blockchains are impossible to change. An artist can provide proof authenticating an artwork that can never be altered. This proof can then be sold at auction passing it from artist to collector, making blockchain art highly liquid.

Why pay money for NFT’s if I can consume media for free?

As an art advisor, this question pops out a lot lately. Well, you can also look at Picasso’s work for free, in a museum, gallery or even online, however that won’t make you the owner. You can even own the best replica ever of that same painting but you won’t be able to sell it as the real owner. In the end, the CoA counts more than the work itself so paying money for an NFT is the same as buying an original painting with its original certificate.

Do people really think this will become a form of art collecting?

Yes, some people are getting interested in NFTs and how that can turn newbies into becoming art collectors or regular individuals can just be interested in a new way of starting an investment. Nevertheless, in this particular case, what collectors buy are “non-fungible” tokens. Non-fungible means either one of or a limited edition that is made once. NFT tokens cannot be replicated. In some cases, the art or these media objects will be stored on the blockchain, but more commonly the NFT will reference an external artwork. While many people might not consider this “owning art”, it’s clear that many collectors do. The implication is NFT artworks are scarce and therefore highly valuable.

Are NFTs just a hyped-up trend?

This growth has led to concerns of an NFT balloon, – one that may explode when the world emerges from massive global pandemic-era restrictions…
While collector Rodriguez-Fraile thinks that “NFTs are here to stay,” he accepted that “we might be going through a period of hype… and I think the general ecosystem might slow down a bit when it comes to pricing.”
For Cock Foster – founder of Nifty Gateway, however, the return to normality offers opportunities rather than threats: Not limited to but because galleries can propose ways to experience digital art beyond a computer screen.
“Digital art is very, very immersive,” Foster said while adding that displaying art is still important to online collectors. “So, I think we can build some really cool physical experiences.”

Future Forcasts

Nifty Gateway may be a long-distance from its goal of 1 billion collectors, but the platform’s growth nevertheless reveals an overwhelming interest in crypto art. In March 2020, the site recorded monthly transactions of $30,000; last month, this number was up to $75 million, according to Cock Foster.
This big jump coincides with the biggest casualty in the art world: Covid-19. With galleries and auction houses shuttered around the world, and people spending more time browsing the web and shopping online,- NFTs have opened up a new outlet for art enthusiasts and collectors.

NFTs and the Art Market

Christie’s is no stranger to new technology. The company has hosted regular Art+Tech Summits since 2018. Back then, Christie’s proudly announced it was “the first auction house to offer a work of art created by an algorithm”, with the sale of the AI-generated painting Portrait of Edmond Belamy for more than 40 times its estimate.
At the same time, Christie’s upcoming auction is only the tip of the NFT collecting iceberg. Industry publication Coindesk, estimates the total value of the NFT market to be US$250 million. Platforms such as Opensea, Nifty Gateway and SuperRare host a rapidly expanding range of digital collectables to buy and sell by a growing community of collectors.

NFTs are useful in the digital art market because they enable claims to authenticity and scarcity, despite the ease with which digital works can ordinarily be copied. Artists and galleries have tried to create scarcity via limited-edition works and to assure authenticity with certificates, but NFTs seek to automate this process. NFTs document and register ownership on a blockchain, which is a decentralised alternative to a central database. Built through cryptography and niche community networks, blockchains are resistant to plagiarism and hacking, which makes them useful for storing important records.

So, when selling Beeple’s “Everydays” as “the first purely digital work” to be offered by a major auction house, Christie’s is reinforcing its self-described “position at the forefront of innovation in the art world”… Quite a statement, right?

Auction houses are trying to jump on the trend as quickly as possible. Sotheby’s has alreay launched its first NFT auction, a three-day sale of works by the anonymous crypto artist Pak. On day one it raised almost $10 million. Phillips will sell its first NFTs later on.

Nft’s and the Museum Industry

In light of these headlines and hype, today there are more questions and concerns than there are answers about how NFTs may impact museums. While recent news has started to illuminate the potential applications of NFTs in arts and culture, this technology also comes with some environmental repercussions and other obstacles that must be considered. So here are the 3 main issues:

The environmental cost of NFTs

Environmental concerns are top of mind. “The escalation of resources to create the idea of scarcity makes it hard for museums to get into and though there’s a buzz about clean, green NFTs, we are far away and it would be wise for museums to pause before jumping in.” — Holly Shen, Former Deputy Director at San Jose Museum of Art.

Minting of Museums

The idea of museums minting works came from earlier this year when a group called Global Art Museum started listing NFTs from open access collections, such as those of the Rijksmuseum and the Art Institute of Chicago, using it as a social experiment. As slow-moving, non-profit institutions, museums aren’t to be expected to launch into NFT marketplaces, however, there are certain areas of potential revenue income. Collaborating with artists on charity NFTs, in the same way, artists produce limited release prints or collectables around an exhibition, is one option. Simpler and easier still would be opening a cryptocurrency wallet and allowing people to donate (as many prominent charities already do)…

Will NFTs create more opportunities?

Limitations regarding accessibility and inclusion carried over from traditional to digital art first emerged in the 1960s. Practices and cultural behaviours mirrored as institutions belatedly began collecting digital work. Similar issues of diversity and representation are still present in the NFT sector, nevertheless, the removal of establishment gatekeepers is creating a more welcoming environment for artists and collectors that are still alive.

Galleries and Digital Art

Artists who have never worked with NFTs are starting to do so, – not through galleries, which have little access to the crypto community, but through NFT specialists. The CEO of the NFT platform MakersPlace, Daniel Chu foretells that companies like his will, over time, dismantle traditional institutions. “If there’s any indication from past examples,” he says, “things that are taken over by a digital movement tend to not exist anymore.”

But that won’t happen anytime soon… NFT platforms still struggle to curate and promote auction pieces, craft galleries and auction houses have mastered as a way to drive up value. The art market’s central idea is that the object itself is less of a determinant in price than the story you tell about it. But anybody can put an NFT up for sale on these sites, and visiting one is to wade through an undifferentiated mass of images.

Yet, there are signs that the NFT world is catching up. In March, Casey Reas, an artist and curator in Los Angeles, launched a new venture called Feral File. Reas selects small groups of NFT artists working with similar themes and presents their work in an online exhibition, selling limited editions of their pieces. It is a middle ground between NFT platforms and galleries, adopting the technology and economics of the former and the rigour of the latter.

Increasingly and surprisingly, more artists are turning to traditional auction houses to sell new work. Institutions like Christie’s and Sotheby’s take smaller commissions than the major galleries that ordinarily handle the primary market, and their brands carry more cultural capital. They are also experts at generating buzz around their events. “There’s less of a tradeoff to working with an auction house,” says Robert Alice, Christie’s first NFT artist. “It’s becoming obvious that if you want exposure that Auction Houses can be much better than galleries.”

Is Digital Art worth more than Traditional Art?

In response to the lockdown and the absence of offline, in-person consumption of art in the form of ownership or experiences, a different mode of consuming art has become ascendant: that of liquid consumption, which supersedes the solid consumption of material objects. The concept of liquid consumption emphasizes the dematerialization of goods and experiences.

However, the idea that big-money collectors are paying huge money for works that can often be seen and shared digitally for free is not that simple… Some digital-art collectors said they’re paying not just for the pixels but also for the digital artists’ labour to make that piece. And of course, for the scarcity they implied. Still, a valid concern arouses that those evaluations have become artificially inflated. Some non-believers said that just as bitcoin has proven to be a volatile asset, NFT prices are likely to swing down. In my opinion, this current version of non-fungible tokens will continue to evolve into bigger and broader use cases.

Are NFTs a good thing for artists?

Many digital artists, after being fed up for years for producing content that generates visits and engagement on big social media platforms like Facebook and Instagram, while getting almost nothing in return, have jumped recklessly into the trend. Artists of all kinds—designers, musicians, filmmakers, – envision a future in which NFTs reconstruct both their creative process and how the world regards art, now that it’s possible to actually “own” and sell digital art for the first time. “You will have so many people from different backgrounds and genres coming in to share their art, connect with people and potentially build a career,” Boykins says. “Artists put so much of their time—and themselves—into their work. To see them compensated on an appropriate scale, it’s really comforting.”

The NFT market just works differently… Its artists, usually immersed in the world of blockchains and cryptocurrency, use social media to build their audience in that community, and then sell their work directly to crypto collectors through specialist online platforms like MakersPlace and Nifty Gateway. These platforms take a roughly 10% commission on each sale and offer artists automated resale royalties at rates set by the artists themselves. According to a British crypto artist who goes by the name Robert Alice, “sometimes, after three or four weeks, you are making more money from the resale than you are from the initial value of the drop.”

The Overall Potential of NFTs

NFTs create possibilities for new business models that didn’t exist before. Artists can attach conditions to an NFT that assures they get some of the proceeds every time it gets resold, meaning they benefit if their work increases in value. Admittedly, football teams have been using alike contractual clauses when selling on players for a while, but NFTs remove the need to track an asset’s progress and enforce such entitlements on each sale.

New art platforms, such as Niio Art, can demonstrate in a really simple way that they own digital works. When customers borrow or buy art from the platform, they can display it on a screen in the knowledge that there is no issue with copyright or originality because the NFT and blockchain guarantees that ownership is authentic.

Also, NFTs gives musicians the potential to provide enhanced media and special perks to their fans. And with sports memorabilia, between 50% and 80% of items are thought to be fake. Putting these pieces into NFTs with a clear transaction history back to the creator could overcome this counterfeiting problem.
But beyond these fields, the potential of NFTs goes much further because they completely change the rules of ownership. Transactions in which ownership of something changes hands have usually depended on layers of middlemen to establish trust in the transaction, exchange contracts and ensure that money changes hands.

There will be many other improvements in this decentralized economy that have yet to be imagined. It will be a much more transparent and straightforward type of market than what we are used to.

How to Buy NFTs

There are a variety of marketplaces on which to buy and sell NFT’s: Nifty Gateway, MakersPlace, OpenSea and Rarible are just a few of many platforms dedicated to purchasing and selling these types of media. For those who might be interested in NBA and Sports related highlight collectables, check out NBA Top Shot—where $230 million(!) has already been spent just by trading tokens, or “legendary moments”… Crazy, right?

How to Make and Sell NFTs

If you’re an artist, a designer or any other type of creator, you could make and turn anything you do into an NFT. So, let’s say you have a meme you want to turn into an NFT, or, an image or a video or any other visual like media: the so famous Nyan Cat, you know that cat…? That animated cat that flies off in space with a Rainbow trail behind him… Yes, Nyan Cat was sold as an NFT for almost $600,000, and you only have to register on one of those websites and you are, pretty much, all set and good to go. The process differs from site to site obviously, but you can start on platforms like Nifty Gateway, where basically you just have to apply to create a project so it can be sold as an NFT on its marketplace.

Conclusion

• In retrospective, NFTs are essentially digital visual media you can claim ownership over.
• NFTs are an easier way to sell and purchase authenticated work off of the internet. NFTs allow anyone to own a piece of digital content as well as facilitate sellers and creators to sell their work through a safe and regulated environment, making it easy for anyone interested in investing or simply just interested in collecting artworks.
• NFTs are useful in the digital art market because they enable claims to authenticity and scarcity.
• NFTs reconstruct both the artist’s creative process and how the world regards art, now that it’s possible to actually “own” and sell digital art for the first time, artists can benefit from selling their own work.
• NFTs create possibilities for new business models that didn’t exist before. Artists can attach conditions to an NFT that assures they get some of the proceeds every time it gets resold, meaning they benefit if their work increases in value.
• NFTs can be highly valuable depending on how trending and viral a piece of content is.
• Due to its “virality” and “trendiness”, it makes sense hopping on this hot new trend as fast as you can, otherwise, due to market and financial fluctuations, you might lose momento and value over the piece of content you might be interested in.

Art dealers can be rather intimidating. They are popular for selling really expensive artworks, ( yes, I’m speaking about millions ) dressing and partying like James Bond, with a deep commercial and intellectual knowledge of art history. They seem to have it all. Money, nice clothes, a nice and wealthy group of friends, and of course nice artworks.But how much money do art dealers actually earn? And how they make money selling artworks?

Well, for start not all art dealers actually sell a million dollars piece of art, and even the ones that do, once upon a time they were just like any other normal young adult. Some did unpaid internships, some struggled a lot , and all of them, literally made mistakes. So, we’re going to be reviewing all the important topics in order to deeply explain how art dealers do money.

The Different types of art dealers

Not all art dealers sell the same. Imagine the art sector as the fashion one. While Chanel and Christian Dior are haute couture, Balenciaga and Vetements are ready to wear / street style. As in fashion the art market can be divided in Old Masters, Modernism and Contemporary Art. Therefore, this division is rather light. If we have a look at the Sotheby’s departments we can see that. We have Asian Art, American Art, African Art, Canadian Art, Indian Art, Russian Art, Impressionists etc etc.

This division is important in order to understand why not all art dealers are the same. Art dealers usually specialise themselves in one or two categories. Some focus in modern and contemporary art while others are focused just in contemporary art. Some are experts in Russian art, while others are masters of the Asian Art. Each art dealer has a niche, if they don’t then I wouldn’t advise you to work with them. Imagine one of your favorite restaurants, usually the best restaurants are focused in a type of food. Can be Indian food, Portuguese food, steakhouse or fish place, it doesn’t matter in what they are specialised in, therefore they are. Have you ever been in a restaurant that offers a mix and match of dishes ? Probably yeah, therefore the quality of their dishes is not their focus. Quantity over quality is not a must in this business.

The Primary and Secondary Market

This division is one of the must know in the art world. It will help you to understand not just the different types of art dealers but is impressive how a little point can open your mind and knowledge of the art world.

Primary Market

The primary art market refers to an artwork that comes to the market for the first time. That can be at a gallery, art exhibition or when it’s sold from the artist studio to the purchaser, whether a collector, a business, a foundation or a dealer. This is also the time when the price for the artwork is established for the first time. The primary market usually has the Emerging and Established artists. Prices here range from hundreds to some thousands.

Some art dealers work only in the primary market. Moreover this sector is rather complicated. Majority of art collectors don’t feel “safe” buying new artists. “What will happen if one day she or he stop painting?” This is n recurrent question from art collectors. It can be risky to only work with new artists and is even more complicated to convince art collectors to invest deep in this area. No one likes to burn money, and when we are speaking about fine art where the prices aren’t affordable to everybody, usually people think twice before showing the wallet.

Art dealers who only work in the primary market must have a really good business and marketing plan in order to survive in the market. Moreover there are some art dealers who work in both markets. Is not unusual to see art dealers who invest deeply in new talent but use the cashflow from their secondary market sales.

Secondary Market

Once the artwork is purchased on the primary market and the purchaser, decides to sell it, it goes into the secondary market. For example, most artworks at an auction house are part of the secondary market. Some people compare the secondary market to the second-hand market. Even if I I’m not a big fan of such comparation, it’s an easy tip to understand.

Dealers who only work on the secondary market usually work with wealthy art collectors that know what they want. They can also work as advisors to art funds that are more occupied with doing a profit from the art market than getting something to hang in their walls. Usually those dealers are already in the market for a long period and have a good contact list of collectors who are already in the market for a while as well.

How art dealers make money

Art dealers make money from the sell of artworks. Usually art dealers get a commission of the sell. The commission can range from 30 to 60% in the primary market. The secondary market is rather different, usually commissions here start at 5% for artworks over a million and can scale to 20% for art works under $100,000.

Some art dealers also work as art advisors, and that way they can apart from the commissions (usually lower) get a retainer from the client. The retainer varies according with the clients needs and desires. While some want small advises about shipping and reselling, others want to build entire art collections from scratch.

How much money do art dealers do

It’s difficult to say what an average income for an art dealer is. Some dealers specialise in blue-chip works that can range from mid five-figure prices up to millions of dollars. On the other end of the scale, a dealer showing emerging and “unknown” established artists may deal in prices ranging from a few hundred to a few thousand per art work. When dealing with the higher end of the price range, it’s not uncommon to go for weeks or even months without a sale before hitting a big one.

What makes art dealers successful

What makes any art dealer successful is the combination of a sales person drive with a deep knowledge of the art market. It is necessary to have clients but more important than that is the capacity to keep them continuously happy. In order to achieve that, art dealers must understand deeply each client. Their likes, dislikes, their personality, their goals, their mood … literally everything in order to understand what they really want.

Being Informed

Any successful art dealer is deeply informed about the art market in order to inform their clients. The last lots sold on auction, the artists increasing and decreasing in value, the trends, the new galleries, everything must be known. The best art dealers and advisors are specialized at one maximum two art segment. Being focused is the key here, and art dealers know that. This focus and deep knowledge in one area of the market will make possible for them to be the best at it.

Originality

If artists must surprise the market with new ideas, no less is expected from art dealers. Art dealers are expected to have an original taste and are the responsible to discover new artists and put them in the market. They must be originals and don’t ever copy ideas from others already successful dealers. Originality is really important in all segments of this market. A copy will always be a copy, it doesn’t matter if it is a copy of a painting or a copy of ideas from another art dealer. Copying is a dead sentence in this field. Have in mind that any successful art dealer had and has to stand out from the crowd.

Good in business

It is true that any art dealer must really love art and know a lot about it. Therefore if an art dealer has no vision or talent for business, the chances of success are quite low. Any art dealer needs to know how to sell their product. Loving art and know a lot about it is nice, therefore in the end of the day the most important thing here is to sell art.

Knowing upfront their costs

Being an art dealer with a great reputation for sales and placing artwork with significant collections is important. Equally important is understanding their costs . How do they calculate taxes ? Do they include the rent cost in the artwork final price?

I know a lot of art dealers that get surprised when they need to pay more tax than expected. Art dealing has costs. Rent, employees, water, electricity, exhibitions costs, art openings costs, tax etc etc. Some art dealers calculate and price their artworks in order to cover all their costs, other don’t. A successful art dealer must have all cover and know upfront how much has to spend each month in order to keep the business alive.

Network and contacts

I can’t emphasise this enough. Art dealers have to network A LOT in order to do nice contacts. By nice contacts I mean people who actually want to buy and invest in art. Let’s be honest, no one “needs” art. Art doesn’t feed anybody or protects any human from cold for example. Art can be “the food of the soul” but music or theatre can too. There is a small group of people in this world that is interested in visual arts. In order to meet who is who in this area art dealers have to network in art galleries openings, museus, charity events etc etc. Moreover don’t forget that if making contacts is 50% of the business, the other 50% are only possible if the art dealer can keep the client over and over again.

Conclusion

• Not all art dealers sell the same
• Art dealers usually specialise themselves in one or two categories
• The primary art market refers to an artwork that comes to the market for the first time
• The secondary market refers to an artwork that had been sold before coming to the market again
• Usually art dealers get a commission of the sell. The commission can range from 30 to 60% in the primary market and from 5 to 20% in the secondary one.
• Some dealers specialise in blue-chip works that can range from mid five-figure prices up to millions of dollars
• A dealer showing emerging and “unknown” established artists may deal in prices ranging from a few hundred to a few thousand per art work
• What makes any art dealer successful is the combination of a sales person drive with a deep knowledge of the art market

You may also be interested in

• Do Art Collectors Actually Need Curators?
• The Art Collector’s mind: What are they Looking For?
• How to Collect Art When You Know Nothing About It

Art collector’s are much more than art buyers. They are actually the ones who with museums dictate the art world trends. Fuelled by passion, consumerism, aesthetic passion and investment, art collectors’ power can be easily recognized and ‘categorised’ in different categories. So, what do art collectors look for?

Different collectors look for different things. As example a contemporary art collector won’t look after old masters artworks. A pop art art collector won’t research about conceptual art. Therefore, there are some mutual aspects that allow them to be art collectors. A desire to live with art, a passion for artists and their stories, art-world validation, art investment, among others.

What do art collectors look for?

Unlike simple art assemblages, art collections are meticulously well-planned projects. The art collectors submerge themselves deep into the subject of their interest and spend years and years looking for very particular art pieces that can bring the entire narrative together.So, what are the Collectors’ top motivations for purchasing art?

Aesthetics

All art collectors were once people who lived without art. If Rome wasn’t built in a day, no art collection can. The interesting fact is that majority of art collectors when they first started as outsiders they bought they first art piece in order to decorate their homes. The love to collect started after.

Another interesting fact is that more than 50% of art collectors who buy even to investment, cares deeply about aesthetics in order to purchase.

Art as an investment

Sometimes I get sad when artists complain that art is sold to investment purposes. I’m not saying that all art should be sold for the sake of profit, therefore the art market is a market, and should be taken care as such.

Not all art collectors buy art as an investment, therefore I don’t know any who said that an artwork appreciating in value overtime is not welcome. For whom is interested in art purely for investment purposes there are Art Investment Funds which are dedicated to the generation of a profitable return by acquiring and disposing of various works of art. Those funds are managed by a professional art investment management or art advisory firm who has expertise in the field. Having art as an investment asset in a portfolio doesn’t make it’s investor an art collector.

Passion for artists personalities and their stories

Artists are really interesting human beings, if they would not be “different” they would not be artists. They all have different personalities therefore there are mutual traces that make them artists. Art collectors are usually people more involved somehow in business, and even if not, knowing one or various artists is like getting into a different world. The way how artists see and perceive things are usually different, and art collectors like to understand why.

It’s interesting that some of the art collectors that I know wanted to be artists themselves. Once that achievement wasn’t possible, usually due to parents not approval, it’s like if they try to somehow get into the art world differently.

Art-world validation

A collector’s net worth is obviously correlated with their propensity to conspicuous consumption. Newbies to the market want and need a certain validation not just by other collectors but by museums, auction houses, collectors, artists and galleries. Some art collectors care about the art-world validation, while others prefer don’t even been seen in.

Higher status collectors reinforce status hierarchies through their privileged access to resources for displaying aesthetic confidence and their policing of lower status collectors’ claims. Performances of aesthetic confidence are both influenced by status and necessary for displaying status

The Different types of art Collectors

According with Artsy, there are ” Four Tribes of Art Collectors “. Let’s have a look.

In order to understand what each collector is looking for, once collectors for same category look for similar things. Let’s start by The Trophy Hunter:

The Trophy Hunter

You know, Leonardo da Vinci’s Salvator Mundi (Savior of the World), sold for $450 million at Christies in 2017 to Saudi Prince Bader bin Abdullah …

For this “tribe” money is not a problem, for them is on what they spend their money that counts. They are rich enough to have more power over art trends than museums. This allows them to ignore the social structure of the art world.

Those collectors are the ones that can buy a Willem de Kooning for 62 millions or a Jeff Koons Rabbit for 91 millions without the need of thinking twice. Trophy Hunter Collectors are another level inside the art world. If this is the jungle those are the lions of the kingdom of art collecting.

For them Art delivers two types of pleasures: the joy of looking and the adrenaline of procuring. For Thorstein Veblen, those people are the ones who represent his theory of the ” conspicuous consumption “. Referring to consumers who buy expensive items to display wealth and income rather than to cover the real needs of the consumer.

When describing the art in their collection, they often don’t talk about the art itself but more about how they managed to buy the painting and how much they bought it for.

If you are not a famous artist already, whose paintings are worth millions, it is unlikely that you’re ever going to sell one of your artworks to a trophy hunter. Even if you are a successful artist, you may never come across this group as they predominantly purchase at auctions. The thrill of the chase is what drives them most.

What do they look for:

• Trophy Art
• Famous Names

The Aesthete

Introverted and not much self-conscious about the fact that they are art collectors, the Aesthete character is interesting. With some genius in this group, who left amazing art collections ( as example Yves Saint Laurent and his partner Pierre Bergé ) the Aesthete collectors are driven by a visceral response to the object. They’re often aware of what is fashionable, but almost never buy on the cutting edge of fashion.

Driven more by gut instinct, aesthetes collect vividly in the moment, but with a grand vision that unites disparate objects.

What do they look for:

• Aesthetic beauty
• Eccentric art

The Enterprising Collector

Gossip, lawsuits information, misinformation, fads, and rumors of the contemporary art market. Dynamic and real people make the Enterprising Collector tribe who is rather Extroverted and loves to have fun.

Enterprise collectors are wide open to the new and experimental. “Typically first-generation entrepreneurs, often from market-driven professions like finance and real estate, they view art as an asset class, but rarely as a pure investment (although most maintain lines of credit against their collections).” Artsy

These collectors are engaged in a kind of ethical combat to identify and elevate the art that will matter. Priced out of trophy hunting and too financially driven for the connoisseurs, their goal is to destabilize the market, in order to define and redefine art history through collecting.

While their ambition often exceeds their ability, a few—names such as Robert Scull, Charles Saatchi, and Guy Ullens—cut through the hype and help canonize the art of their time.

But despite an openness to new ideas, this is not an open society. Beneath the charm and flattery exists an intense competition for access: to top pictures, the right dinners, the most exclusive parties, the most prestigious museum boards. For this tribe, owning the right painting delivers a jolt of status more effectively than the efforts of the best PR firm.

What do they look for:

• New Talent
• Experimental artworks are welcome
• Extroverted gatherings

The Connoisseur

Connoisseurs are the academics of the art market. They buy methodically and rarely as an investment. They force us to stop and appreciate.

Independent, and unaffected by accepted taste , they are almost like the new avant-garde. They are, however, deeply invested in the opinions of a select few once expert opinion often matters more than fact. They socialize selectively, often excluding the art newbies who will eventually miss the subtle essentials.

I usually find those collectors in the old masters sector. They are introverted art collectors, some really wealthy therefore, they prefer to keep themselves behind the scenes.

What do they look for:

• Art with academic meaning
• Introverted art

Conclusion

• Different collectors look for different things
• A desire to live with art, a passion for artists and their stories, art-world validation and art investment are the top key factors drivin art collectors.
• There are different types of art collectors
• The Trophy Hunter looks for trophy art
• The Aesthete looks for something eccentric
• The Enterprising Collector cares more about new talent
• The Connoisseur prefers the intellectual side of the art

As an art outsider, is normal to think that abstract art gets sold for crazy prices. Auction houses as Christies and Sotheby’s also fuelled that trend.  If an abstract piece of de Kooning sold in 2015 for 300 Million on a private sale can be a surprise for many, for who works is this field it actually isn’t. Abstract art is expensive.

So, why is abstract art so expensive? Abstract art is expensive for a simple reason. There is demand for it! Nowadays people buy art not just because they like it but because it can be a good financial investment. Adding this with the conspicuous consumption trend and the number of billionaires increasing out there, it’s easy to understand why some abstract art is so expensive. 

What makes abstract art so expensive?

When we speak about art pieces that are sold for huge numbers we are speaking about trophy art. Abstract art is sold by high prices due to different factors as conspicuous consumption, art as an investment and market speculation. 

Conspicuous Consumption in the art market 

Conspicuous consumption is the spending of money in acquiring luxury goods and services in order to display economic power. Thorstein Veblen created this term as a reaction to the over-the-top wastefulness of a gilt society. 

Veblen had plenty to say about the arts and the reasoning behind their support. For him, our ideas of beauty were inextricably tied to rarity and expense. He compared art to diamonds. While similar in many ways to common glass, diamonds are rare in the earth’s crust and difficult to dig out. Seen under these contexts, they become beautiful. Further, while a Willem de Kooning oil might be worth big bucks, it’s also big bucks that make De Kooning worthy. Veblen noted that frivolities and false values came about due to the human need to demonstrate wealth and to establish status.

Art assets are appealing both for their ability to transfer consumption over time and for their use as signals of wealth. Adding art value to utility, returns also reflect this “conspicuous consumption” dividend.

If we look for the profile of the usual art buyer that is willing to give huge amounts of money in order to obtain art we can see a pattern. 

a) They have at least over 5 million in their bank accounts 

b) They have already a considerable amount of properties

c) They have at least one luxury car 

So how can they now show to the world that they have money? Simple, buying art. 

Abstract Art is a Good Investment 

Buying art only to make properties looking aesthetically more pleasant is in the past. Nowadays art is bought also as an investment. And as an investment modern and contemporary art where we have the abstract one are the more profitable ones. Not only abstract paintings showed to mantain their price overtime, they also increase value between 4 to 8% year. 

Art is a significant investment class, which is highly uncorrelated to other asset classes. Such uncorrelated categories in an investment portfolio can offset potential losses and generate good returns. As indicated by the performance of the art market in 2018. During the same period, other conventional markets floundered. To safeguard their portfolio in the long run, savvy investors are turning towards art to amplify their returns. 

Art investment is becoming more critical than ever before since it is a viable choice for diversification. To maintain the financial strength of an investment during times of economic uncertainty. It is crucial to have asset classes at hand, which move independently of one another.

The Wall Street Journal declared art to be the best investment class in 2018. The art market performed far better than other markets during 2018, as evidenced by the numbers. Blue-chip artwork posted an average gain of 10.6%, whereas the S&P 500 securities fell by 5.1% during the same period. What makes this feat remarkable is that 2018 was an exceedingly difficult year during which several markets declined, including gold.

Market speculation 

For starters, let’s take a crash course in the fundamentals of speculating. A speculator is someone who buys (invests) based not on current value and demand, but rather on predictions. The objective here is to resell at a higher price at that future, basically a vehicle to grow wealth. 

That buyer, in turn, continues the speculation. Hoping to resell at a later date for a higher price to a subsequent speculator, who will in turn continue the speculation.

An aggravating factor, specific to speculating on art, is that art has no tangible value. Artists sit in their studios and manipulate various mediums into various forms. Then their galleries, dealers, or agents declare to be art, declare to be worth certain dollar amounts.

Most art buyers, that go to auctions at Sothebys and Christies , are art collectors or resellers that have something in common. Experience, knowlege and money. Imagine a collector who has some 10 works by Pollock. He certainly knows that if he buys a piece of the same artist for a higher value all his other 10 pieces of Pollock will increase value. The same applies to art dealers, who have some pieces by certain artists in their portfolio at a lower price than auction houses but by increasing the value of the artists on auction houses can resale his portfolio for a bigger price. 

Conclusion 

Art market never been so in fashion as nowadays. If before auctions at Sotheby’s and Christies were only for art professionals , nowadays contemporary auctions are more like a fashion week event. Therefore, opposite to the clothes value that decreases overtime, artworks tend to always increase, making it a safer investment that majority of the financial products out there. In the end as I said in the beginning there is only one major reason why abstract art sells for high prices. There is demand for it. 

If you want to know more about how to invest in art have a look a our previous articles. 

5 Reasons to invest in art: https://marianacustodio.com/5-reasons-to-invest-in-art/

Is art a good investment? 11 tips for new art collectors: https://marianacustodio.com/is-art-good-investment-11-tips-new-art-collectors/

Top collectors reveal the secrets of how to invest in art: https://www.bloomberg.com/news/features/2018-05-07/top-collectors-reveal-the-secrets-of-how-to-invest-in-art