Categories Art Market, Market trends

Digital art, the bubble of NFT World?

I was giving a lecture to an undergraduate class at NYU a few weeks ago. NFTs were not the subject, but in the Q&A period one student asked me what I thought about NFTs.

I told him I was watching the space, but hadn’t much to say yet, and asked what he thought. He said NFTs were the future, that in a generation they would be the only art that matters, and he kept reeling off prices: this CryptoPunk went for this amount, such and such sold for so much on Nifty Gateway, etc.

I kept trying to bring the conversation back around: “Yes, but what do you like about these images as art?” He kept coming back at me with the prices.

Finally, after I raised the art question one last time, he said in exasperation: “Ben, when the Maurizio Cattelan banana sold at Art Basel—what was the headline? The money! The money is the art.” (I’m paraphrasing, of course, but it’s close.)

“People are paying [insert outrageous price] for [insert unbelievable thing]?!?” is one of two or three archetypal art stories, as far as the popular interest is concerned. In that sense, NFTs may be new and baffling to the art world, even as they are a kind of an enticingly rarified version of its most ancient commercial mythology.

And look, before I go any further, I want to make something clear: I am very much pro digital art. I am pro digital art, and I am pro digital artists making money. I even, once upon a time, judged an art contest in a virtual world!

But there isn’t really a doubt that the current supernova of interest in trading unique digital objects is a bubble. Why do I think that? Well, for one, Mike “Beeple” Winkelmann—the digital artist who essentially became the face of the new speculative frenzy after the $69 million sale of his collage Everydays: The First 5,000 Days at Christie’s earlier this month—himself is convinced it is.

“It is a bubble, to be quite honest,” Beeple told NPR. “I think you are going to see a mad rush of people come to this space. And a lot of the stuff people are making into NFTs is junk, and that stuff won’t hold value.”

Nevertheless, you have to separate the concept of “unique” digital objects that people can buy, as a general idea, from the question of whether or not there is an NFT bubble at this particular moment. There are plenty of artists who are now doing interesting things online, and are very much worth supporting, and NFTs are one way to do it.

Of course, it is a fairly arbitrary way to do it. Musician-turned-artist Grimes sold her “WarNymph Collection Vol. 1” as NFTs and got a huge amount of money. But then again, Grimes also literally sold her soul last year as an artwork, and that required no special blockchain-powered contract. People have been trading “unique” immaterial assets for a long time, and despite the hype, NFTs are just a social convention.

In recent weeks, everyone from old high school buddies to the local news has reached out to ask me what the deal is with NFTs. My colleague Tim Schneider has a great piece about how the current cryptocurrency-fueled froth echoes the epic Impressionist art bubble of the late ’80s, which was fueled by Japanese real estate prices.

By Ben Davis, part of his article published by ArtNet News on 31st March 2021.