Source: LT Art.
What makes digital art so attractive to art buyers and why is it a good art investment?
It is no secret: NFTs and digital art have been shaking up the art market for the last year, and it probably won’t stop anytime soon. NFTs (Non-Fungible Tokens) are unique metadata referring to a specific asset. As their name suggests, they are non-fungible and indivisible. When an NFT is acquired, the purchase goes through a blockchain, which is a digital record of any transaction ever made with that NFT.
The NFT mania has come in pair with the great explosion of cryptoart’s popularity, allowing digital art to be commercialised by major art institutions and third-party platforms. NFTs and cryptoart are, beyond a revolutionary movement, a reflection of the time we live in, filled with technologies and technical evolutions. But what makes digital art so attractive to art buyers and why is it a good art investment? Here are 5 reasons to invest in digital art.
1. NFTs, digital art and online sales keep booming in 2021, promising positive growth in the future
Whereas physical sales dropped in 2020, due to the pandemic, online sales reached a record high of $12.4 billion, doubling in value from 2019 according to the Art Basel and UBS 2021 report. Earlier this month, the Art Basel and UBS mid-year review 2021 reported that online sales accounted for 37% of the sales made by art dealers for the first half of 2021. An increasing number of new art buyers chose online channels to purchase art whilst 25% of online buyers were art collectors choosing to purchase art online for the first time. Meanwhile, the NFT Report 2020 stated that the Non-Fungible Tokens market had grown by 299% in 2020.
The growth of online sales and NFTs coherently induced increasing commercialisation of cryptoart, which gained approval and demand from the art community. However, its popularity is not solely due to changing art purchasing behaviours or cryptoart’s trendy status. Social media and lockdowns undoubtedly participated in the growing popularity of digital art as the use of online third-party platforms and Instagram by art buyers increased between 2020 and the first half of 2021. Moreover, digital art’s popularity results from its similarities with physical art. Just like traditional forms of art, cryptoart’s acclaim emerges from a passion for art, an emotional response to an art piece or any other feeling that makes our relationship with art so special. With digital art, the desire of owning an original piece remains untouched. Overall, online sales and NFTs’ booming predicts a promising future for digital art that might gain more and more value in the coming years and months.
A Million Yeard Ahead of Me – Frank Sweet
2. Digital Art and NFTs have invaded the physical realm
The involvement of technologies in the production of digital artworks allows digital art to constantly renew itself in endless possibilities. Whether it is the social humanoïd Sophia the Robot producing cryptoart or VR artworks being commercialised on NFT platforms, digital art will continue to surprise us.
In parallel, NFTs have created a bridge between traditional art institutions, digital and physical art. Christie’s famously sold its first-ever digital art piece by Beeple through a unique NFT for 69 million dollars last March, whilst The British Museum recently entered the world of NFTs with the commercialisation of digital postcards by renowned Japanese artist Katsushika Hokusai. Investing in digital art equals setting foot in an always growing community intertwining tradition with revolution.
Self-Surrender and Transition – Frank Sweet
3. Blockchain as a safe technology
Blockchain technology is the technological system supporting the purchase of NFTs and cryptoart. Blockchain is a digital record of any transaction ever made with a given NFT. The technology validates the transaction and records the new acquisition. Because of the way blockchains are designed, the record of a transaction cannot be altered as new data needs to be validated by all computers of the blockchain. Therefore, blockchain technology offers art collectors a trustworthy encrypted way of acquiring art that cannot be faked or physically destroyed.
A Fundamental Transformation – Frank Sweet
4. Digital art opens the art market to a new demography
Certainly, digital art has been attracting a broad range of art collectors but, above all, Millennials. Millennial art buyers have indeed been one of the most important art collector segments in the market since the start of the pandemic. The Art Basel and UBS mid-year review 2021 reported that Millennials art buyers spent more than any of their older counterparts with $378,000, three times more than Boomers or Gen X, and spent more than any other generation in digital art. When Beeple’s ‘5000 days’ was auctioned by Christie’s, 64% of bidders were Millennials, or from Generation Z. Millennials are indeed savvy technology users, willing to embrace what the art market’s new trends have to offer. However, Millennials might soon be followed by their older counterparts. Amongst the high-net-worth collectors participating in the Art Basel and UBS survey, 48% claimed to be interested in digital art in the last 12 months.
Therefore, through NFTs and cryptoart, the art market opens up to digital natives. Art purchases are decomplexified by digital art, accessible online and not solely aimed at an artistic elite.
5. A new community
The increasing popularity of digital art and NFTs have resulted in an unprecedented democratisation of art, providing digital artists with a way of selling their artworks at much higher prices, and get a percentage of the resale value of the NFT. Digital art provides the art public with a broad range of artistic works, maybe more easily accessible to art lovers than traditional art. Frank Sweet, LTA’s digital artist, shared his enthusiasm for digital art and his optimistic view on the future of digital art and NFTs:
‘It’s great! (…) [NFTs] bring artists and art collectors together, that maybe weren’t as much of a community before. It has given me and other artists a way to share our art quite easily. They bring so many new artists, so many new art collectors together with works that have never been done before because it’s not traditional’.
Digital art has revitalised the art scene and gathered a broad community of artists, art buyers and institutions. Interested in digital art? Discover LTArt’s digital art portfolio and shop your favourites here!