Sotheby’s launched its first NFT auction in October this year, achieving a total sale of $18.6m (£13.95m). Co-Head of Digital Art at Sotheby’s Michael Bouhanna told Express.co.uk: “We realised the importance of the technology and how it was enabling digital artists to finally market and sell their works.” He now believes the auction house has a role to play in bridging the gap between the traditional art market and NFTs. With the launch of its Metaverse, a dedicated platform for digital art collectors, Sotheby’s became the first auction house to build a custom NFT marketplace.
Standing for non-fungible token, NFTs are files which have a digital certificate of ownership.
This is stored on the blockchain, the same technology behind cryptocurrencies, meaning it cannot be forged.
NFTs have attracted attention for some of the incredible sale prices they’ve reached.
One CryptoPunk NFT for example sold for $11.4m (£8.58m) at Sotheby’s while the Source Code for the World Wide Web by Sir Tim Berners-Lee sold for $5.4m (£4.06m).
Mr Bouhanna explained there are many factors Sotheby’s look at when valuing an NFT.
“The aesthetic is important, the concept, the idea because with the blockchain technology it can become very conceptual.”
He added: “The community behind an artist or behind a project is very important.”
“It mainly happens on social media so we can feel the market and be aware of the top-selling artists by being immersed in the community through Twitter for example and follow and see all these collectors, what they are purchasing.
“So it’s a good way to keep track of the market the same way we would by following auction sales in our traditional business.”
Knowing which artists are influential in various movements is also key.
Like other art forms NFTs have seen particular trends and movements emerge.
NFT avatars which take the form of headshot style portraits of various characters have been a dominant trend with CryptoPunks and Bored Ape Yacht Club being popular collections.
Mr Bouhanna explained CryptoPunks consists of 10 thousand uniquely generated avatars with prices varying from £300 to £10-15million.
Older art movements have also found an outlet in NFTs though with the generative movement, which traces its origins back to the Sixties, finding a revival.
The generative movement uses autonomous systems to create art often relying on computers.
The rise of NFTs now gives generative artists a way of selling their art in its native form as opposed to having it printed.
Sotheby’s has even been finding NFTs cutting through with many of its existing clients.
At their first creative sale, 30 percent of bidders and buyers were existing customers, many of whom were buying their first NFTs.
Mr Bohanna suggested some clients were more confident buying at an auction house than on NFT marketplaces.
“It’s a long term goal to onboard all the traditional clients who showed interest,” he explained.
While more traditional art has seen fraudsters attempt to pass off fakes many believe NFTs are in fact more secure with the technology able to verify the work’s originality.
Mr Bouhanna explained: “You can verify that the smart contract address of an NFT is one of the ones issued by the artist and nothing can fake that basically.”
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This means even if an NFT was copied it would be possible to tell it had come from another artist.
Unlike a painting Mr Bouhanna said: “There is no way to copy the signature.”
While NFTs have grabbed headlined for their incredible sales prices, Mr Bouhanna explained there was a broad market and range.
He added: “We’ll be looking at making some lower price point NFTs to include for people to be more inclusive and welcome more of this NFT audience to purchase at Sotheby’s.”
Looking to 2022 he predicted the generative movement would continue to dominate and also hoped to see more female digital artists entering the market.
He concluded: “There are some very talented artists, like everywhere in the world, who are already important and collected by some of the top collectors but not necessarily having the spotlight they deserve.
“Next year I hope we will see more female artists in the top 10 NFT artists.”