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How much is too much? Crypto art market brings together deep pockets and big artists

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With the nonfungible token market approaching the frothing point, perhaps it’s time to sit back and ask: “What’s happening here?” The $750,000 in proceeds from the recent sale of a single “alien” CypherPunk NFT, after all, could have paid for a reasonably sized house.

The crypto world at large is only 12 years old, entering adolescence, but crypto art — art on a blockchain — and nonfungible tokens are just out of their terrible twos. The launch of an epoch-defining CryptoKitties goes back to 2017 and 2018, and Ethereum’s nonfungible token, ERC-721 — which is used by many digital galleries and also non-art NFTs — wasn’t developed and rolled out until early 2018. What is being discussed here is still very new.

Moreover, Bitcoin (BTC), the world’s first blockchain project, was initially just a more efficient way to transfer money, though it soon became more — a kind of social movement. In a similar vein, crypto art might evolve to be more than just another collectible. The technology behind it could make every person on the planet — not just the top 1% — owners of unique art pieces, proponents say. Or, as the winner of a crypto art auction said in December: “It’s my biggest wish for crypto to become understood as a liberating technology.”

There’s no question, though, that art — physical or digital — is also about money. The “liberating” art owner cited above has also bid $777,777 for a crypto work by artist Beeple (aka Mike Winkelmann), and it seems fair to ask in light of similar events whether the digital art market is overheating.

An emerging culture?

“It’s a bubble in the sense that capital is rapidly flying into the NFT market and much of that capital is coming from individuals who would otherwise be using that capital to invest and/or trade-in cryptocurrency,” Vladislav Ginzburg, CEO of digital art and collectible market Blockparty, told Cointelegraph. But something else is going on too, he added: “There is a real culture of collectorship emerging around NFT-backed digital art and cultural assets.”

Giovanni Colavizza, assistant professor of digital humanities at the University of Amsterdam, told Cointelegraph: “I believe we are in full price discovery mixed with rapid growth of the NFT collectibles space.” Furthermore, he added that as more wealthy individuals come into the market, the more the “creatives realize how this space can allow them to monetize their work.”

The crypto art world as presently constituted is two-fold, said Ginzburg, embracing artists who have been creating digital art from the beginning but had trouble monetizing and distributing their works — and for whom tokenization is a boon — as well as traditional, physical artists, many with significant followings but who are seeking a still larger global audience.

Justin Roiland, who just sold a crypto art piece for $150,000 at a silent auction on a Gemini-owned art platform, for example, belongs to the first group. “He is an animator — a form of digital art — who has been able to monetize his characters and animations via commercial means on a popular television show,” explained Ginzburg, adding:

“Getting into the NFT space has enabled him to stay natively digital but sell truly unique and ownable works of art without having to learn a new medium, such as printmaking.”

For traditional artists keen on adopting NFTs, “the path is less clear,” added Ginzburg, whose firm is exploring with such artists how NFTs “can support their physical works, as either an ‘add-on’ or possibly a digital extension.”

A niche within a niche market

The traditional art world, where total annual transactions exceed $60 billion, dwarfs digital art, but it still remains a niche market “full of information asymmetries and all kinds of arbitrary obstacles to entry which keep it artificially small,” noted Colavizza. The NFT space, by comparison, is fully transparent and open to anyone, so it isn’t surprising that some established artists would want to test the waters, and that may have something to do with recent NFT activity.

“Several recent big drops have been due to established creatives with a follower base moving to NFT and bringing it with them,” said Colavizza, citing Beeple, who auctioned off his entire NFT collection for $3.2 million, including the single work cited above that went for $777,777, smashing Trevor Jones’ previous crypto art record by 14 times.

Another reason for recent activity, surely, “is the new surge in crypto,” said Colavizza. Bitcoin and Ether (ETH) reached historic highs in the past month. “Several deep pockets are being or have been made. The high liquidity means many are looking for ways to invest, and NFT collectibles are a rapidly growing space to do so.” The downside to this is higher market volatility, he added.

There might be a DeFi aspect to the NFT run as well. “Some collectors have clear plans for their collections — e.g., using it as backing for other DeFi assets or for developing estate/projects in virtual worlds,” added Colavizza. Indeed, FlamingoDAO, the crypto art collective that purchased the “alien” CryptoPunk for $750,000, announced its intent to acquire NFTs and convert them “into fractionalized works so that they can be plugged into emerging DeFi platforms, with rights to these works held and managed by a growing number of people in the Ethereum ecosystem.”

A haven for speculators?

Many, of course, view this all as so much rationalizing of what is just market speculation. Misha Libman, co-founder at art marketplace Snark.art, told Cointelegraph: “There are clearly a lot more speculative purchases in the crypto space with some buyers interested in flipping the NFT tokens for profit,” surely more so than in the traditional art world. Moreover, “we are seeing a lot of emerging artists, and it is difficult to gauge where the prices reflect the quality of the artworks or where they are more driven by speculation.”

Ginzburg agreed that there was a lot of speculative money coming into the NFT market, which could leave just as quickly, but this happens in the traditional art world, too. Still, the foundation of the traditional art market is collectorship. He added:

“Pure speculators tend to be identified, isolated, and shown out pretty quickly. Collectorship keeps prices stable and the market reliably growing. This culture of collectorship is emerging in NFTs, and it’ll be exciting to see.”

Asked how crypto art prices are determined, Ginzburg answered that the basic rules resemble those in traditional art: Who are the artists? What are their backgrounds and achievements? Does their work have quality? Which collectors are interested in them or already own their work? Which galleries/platforms are showcasing their art?

“If there is one primary difference I see, it’s the new creative freedoms that digital art affords the creator,” said Ginzburg. “I would judge NFTs additionally on how many new elements they can bring together: audio, movement, physical accompaniment, etc.”

Priyanka Desai, a community representative at FlamingoDAO, told Cointelegraph that a big difference from pricing traditional art is that there “is no auction house taking a cut, it’s peer to peer,” and it’s also up to the content creators to decide when an offer will be accepted. Traditional art auction houses like Christie’s and Sotheby’s can charge commissions of 25% or higher. Open Sea, an NFT sales platform, by comparison, takes only 2.5% for sales on its platform.

Most NFT transactions are in Ether, the world’s second-largest cryptocurrency after Bitcoin. What would happen to crypto art activity if the price of ETH and/or BTC collapsed, as happened in March 2020? “It can happen in any market, and it happens in traditional art,” said Desai. In any event, the NFT market began rising well before the latest cryptocurrency run-up.

Who are the collectors?

Speculators aside, does the profile of the typical crypto art collector differ much from traditional art collectors? The crypto art buyer “tends to be young and tech-savvy. They’re already familiar with crypto, even if they don’t own any,” said Ginzburg. The market is global, but most participants are American or European, though he conceded that “this is changing very rapidly. They may or may not be art collectors, but they are definitely interested in culture as it relates to music and fashion.”

Libman told Cointelegraph: “The collectors we are seeing in this space are usually not from the traditional art world. They are generally young, educated, technology-friendly, and just like other collector markets, profess specific tastes and strategies.” As the crypto art world becomes more saturated with NFTs, they are becoming more selective, added Libman.

Related: Tokenized art: NFTs paint bright future for artists, blockchain tech

FlamingoDAO, the crypto art collective launched in October, has 55 members — all accredited investors — including “deep crypto, deep NFT people,” said Desai, but also collectors from the traditional art world who want to move into crypto art. They are a mix of ages — “even a few people over 50.”

A COVID-induced fad?

Will demand for tokenized art plunge if and when the coronavirus pandemic ends and people again visit museums and art galleries? “There is no question that the pandemic has given a huge boost to the digital art market,” said Libman, but museums were expanding their digital art collections art before COVID-19, and he expects that process to continue.

“When we look across the adoption of digital format across other industries, from publishing to film and music, we believe that the expansion of the digital art market is unavoidable,” he said, adding:

“Whether the person is experiencing it on a wall or through their smartphone only changes the format. Digital allows artists to reach much wider audiences without the complications of crossing physical borders, applying for visas, and concerning themselves with various logistics.”Will everyone own digital art?

Overall, said Libman: “The NFT art space is an emerging market, and over time, it will mature and probably resemble its traditional counterpart.” Colavizza added: “I am bullish while also conscious that volatility is high and so there will be bumps along the way.”

According to Ginzburg: “The outlook here is extremely positive, as we’re going to see some of the truly great digital artists — who have been confined to monetizing their work via commercial means — start seriously focusing on their personal artwork as a revenue generator via NFTs.”

In the future, owning unique art won’t be restricted to elites who patronize Christie’s and Sotheby’s, Desai told Cointeleraph. “Everyone will have digital art on their walls. Owning digital art will be a part of your digital (online) existence,” part of your identity, like sharing your likes in music or films over social media.

There’s no question, though, that art — physical or digital — is also about money. The “liberating” art owner cited above has also bid $777,777 for a crypto work by artist Beeple (aka Mike Winkelmann), and it seems fair to ask in light of similar events whether the digital art market is overheating.

Source: https://cointelegraph.com/news/how-much-is-too-much-crypto-art-market-brings-together-deep-pockets-and-big-artists

Cointelegraph

Bitcoin 2021 Miami continues with Tony Hawk, Kevin O’Leary and more

Day two of Bitcoin 2021 features a slew of famous speakers and crypto influencers.

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Saturday’s programming will also feature Bobby Lee, the former CEO of China’s first cryptocurrency exchange.

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Bitcoin 2021 Miami continues with Tony Hawk, Kevin O’Leary and more

Bitcoin 2021 Miami continues following Friday’s massive opening of the historic event.

The events kick off at 9:00 am Eastern Time (1:00 pm UTC) with opening remarks by a Miami-Dade County commissioner. Cointelegraph will continue posting Bitcoin 2021 updates on Twitter as well as the YouTube channel.

One of the key speakers for day two will be Tony Hawk, an American skateboarding icon and entrepreneur. Hawk made a major move into the cryptocurrency industry earlier this year, releasing an NFT drop via Ethernity Chain in March featuring a tokenized video of his final 540-degree ollie.

The famous skateboarder will deliver a speech on “When A Counterculture Goes Mainstream” at the Nakamoto Stage at 9:45 am ET (1:45 am UTC). Hawk will also have a meet-and-greet session offering attendees the chance to get a limited-edition skateboard deck signed by the legend.

Hawk’s speech will be followed by a panel discussion devoted to cryptocurrency mining — one of the hottest topics in the crypto community. Shark Tank investor Kevin O’Leary will discuss crypto mining by public companies with Marathon CEO Fred Thiel, Riot Blockchain CEO Jason Les, and Frank Holmes, executive chairman of Hive Blockchain Technologies.

What a first day for #Bitcoin2021! We were there with our amazing team, and want to remind you of the most important moments. Ready for day 2? https://t.co/JDwaIn31Ct

— Cointelegraph (@Cointelegraph) June 5, 2021

Saturday’s event will also feature Bobby Lee, the former CEO of China’s first cryptocurrency exchange, BTCC, which was founded back in 2011. Currently the CEO of cryptocurrency hardware wallet Ballet, Lee will participate in the “Onboarding One Billion Bitcoiners” panel at the main stage at 11:40 am ET (3:40 pm UTC). He will later give a speech on the “Freedom of HODLing” on the End of Fiat Stage at 3:00 pm ET (7:00 pm UTC).

Lightning Labs co-founder and CEO Elizabeth Stark will continue the event with a panel discussion titled “Bitcoin For Billions, Not Billionaires” alongside strategic investor Lyn Alden. Other notable Bitcoin 2021 day-two speakers include Bitcoin programmer Jimmy Song, Galaxy Digital CEO Michael Novogratz, Paxos co-founder and CEO Charles Cascarilla, OKCoin CEO Hong Fang, and Google product director Steve Lee.

Talking now at #Bitcoin2021 with Senator @cynthiamlummis and Congressman @warrendavidson about Bitcoin as a store of value.

— Cointelegraph (@Cointelegraph) June 4, 2021

The last Nakamoto Stage panel called “Evolution Of Exchanges” will start at 3:35 pm ET (7:35 pm UTC) and will feature Avanti CEO Caitlin Long, Alameda Research founder Sam Bankman-Fried, Huobi Global vice president Ciara Sun, and ShapeShift CEO Erik Voorhees.

Source: https://cointelegraph.com/news/bitcoin-2021-miami-continues-with-tony-hawk-kevin-o-leary-and-more

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Russian Bitcoin critic says he would have bought BTC for 100 rubles

Russian State Duma member Anatoly Aksakov said that he has never bought any Bitcoin due to its high price and the official ban on government officials purchasing crypto.

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One of the biggest Bitcoin critics, Russian official Anatoly Aksakov said he wanted to buy Bitcoin before the ban but the price was too high.

Russian Bitcoin critic says he would have bought BTC for 100 rubles

Anatoly Aksakov, a member of the Russia’s State Duma and a key spokesman for the country’s cryptocurrency legislation process, claimed that he has never owned any Bitcoin (BTC).

Aksakov said that he doesn’t hold any Bitcoin and likely won’t, as the government has prohibited officials from purchasing crypto, local news agency TASS reports Thursday.

The official went on to say that he was willing to buy some Bitcoin as an investment before the ban came into force last year. However, he thought that the price was too high at the time:

“I wanted to buy only in order to accumulate. But Bitcoin had already surged too much, and I was upset about spending money. If it had cost 100 rubles, I would have bought it.”

In the interview, Aksakov also argued that Bitcoin should not be available to unqualified investors due to its extreme volatility. He also touched upon the development of Russia’s crypto tax regime, noting that crypto tax reports are currently made on a voluntary basis as a draft bill that would make reporting mandatory has only passed its first reading in parliament.

Aksakov is a major financial official in Russia who serves as chairman of the Russian State Duma Committee on Financial Markets as well as a member of the Bank of Russia’s National Banking Council. Aksakov has emerged as a major Bitcoin critic, predicting last year that BTC had no future.

Aksakov’s remarks come shortly after another regulatory initiative suggested to partially lift the country’s ban on crypto payments in late May. The country officially enforced the ban in January as part of its major cryptocurrency law, “On Digital Financial Assets.”

Source: https://cointelegraph.com/news/russian-bitcoin-critic-says-he-would-have-bought-btc-for-100-rubles

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Druckenmiller: Ethereum is ‘MySpace before Facebook’ while Bitcoin won as ‘Google’

Ether flippening Bitcoin is back in mainstream media.

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Bitcoin (BTC) is at risk of a “flippening” from Ether (ETH), mainstream media claims as some familiar FUD — fear, uncertainty and doubt —returns to the spotlight.

As BTC/USD continues to flag below $40,000, an old argument has resurfaced — but major investors are fighting back.

Bloomberg: ETH “will likely exceed Bitcoin”

In an article on May 31, Bloomberg cited multiple sources claiming that in the future, Ether will overtake Bitcoin as the world’s cryptocurrency of choice.

The largest altcoin “will likely exceed Bitcoin at some point in the future, as Ethereum will be superior when it comes to innovation and developer interest,” Tegan Kline, co-founder of Blockchain firm Edge & Node, told the publication.

Another executive added that Ethereum has a “better growth story.”

The argument is far from new and has appeared regularly throughout Ethereum’s existence. The Ethereum network’s recent major upgrade has kept its profile afloat, and ETH has outperformed Bitcoin over the past year and formed the backbone of the decentralized finance (DeFi) phenomenon.

ETH/BTC, long on a losing streak, reached its highest exchange rate in three years earlier this month.

ETH has also managed to preserve more of its price gains than Bitcoin in recent days. As Cointelegraph reported, a key moving average remains intact for ETH/USD, while BTC/USD has failed to recapture “lines in the sand.”

ETH/BTC 1-week candle chart (Bitstamp). Source: TradingViewDruckenmiller compares Ethereum to MySpace

For all its impressive performance, however, claiming that Ethereum will replace Bitcoin at the top is nonsensical, many argue — and not only staunch Bitcoin supporters.

The only flippening happening this year pic.twitter.com/cY0necJ3GM

— William Clemente III (@WClementeIII) May 29, 2021

In an interview with The Hustle last week, billionaire investor Stanley Druckenmiller became the latest non-technical figure to cast aside doubts about Bitcoin’s staying power.

“I think BTC has won the store of value game because it’s a brand, it’s been around for 13-14 years and it has a finite supply,” he said.

“Is it going to be gold? I don’t know. It’s sure as hell doing a good imitation of it the last year or two.”

For Druckenmiller, Ethereum is to Bitcoin what MySpace is to Google.

“I’m a little more skeptical of whether it can hold its position. It reminds me a little of MySpace before Facebook,” he continued.

“Or maybe a better analogy is Yahoo before Google came along. Google wasn’t that much faster than Yahoo, but it didn’t need to be. All it needed to be was a little bit faster and the rest is history.”

Others have long pointed out that technically, Bitcoin and Ethereum have little in common. Bitcoin’s finite supply and years of resistance to attacks place it in a different league than any other cryptocurrency, and comparing another one to it is an apples-to-oranges comparison.

“I generally think all the other digital currencies don’t really compete with Bitcoin and are in no way similar to Bitcoin,” Saifedean Ammous, author of The Bitcoin Standard, famously told the Unchained Podcast in August 2017.

“I think their real competition is, if I’m generous, I’ll say Amazon Web Services and these kinds of platforms.”

Source: https://cointelegraph.com/news/druckenmiller-ethereum-is-myspace-before-facebook-while-bitcoin-won-as-google

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