The market is going digital! What happened in digital art in 2021?

11 January 2022

The market is going digital! What happened in digital art in 2021?

After processing the first shock of the pandemic along with the fluctuations it brought to the art market, favourable developments indicated that 2021 would be a promising year. And it was remarkable, especially for digital art and the digitalization of the art market. The introduction of non-fungible tokens (NFTs) and blockchain technology into the art market was an absolute game-changer.

Although they are still a matter of debate among the authorities within the industry, NFTs have gained momentum and secured a considerable place in the market. We could feel this happening in the early days of March on through the sales of Beeple’s digital work: "EVERYDAYS: THE FIRST 5000 DAYS", which became the first NFT ever offered and sold online by Christie’s. This was a collection of daily pictures of the artist, from the early days of his initial period on through almost 14 years of his artistic journey. The auction house sold it for $69,346,250 and for the first time in the auction history, accepted payment in cryptocurrency (Ether-ETH). Surprisingly, the record price exceeded that of many world-famous oil paintings, and through this sale Beeple became the third most expensive living artist.

In a similar vein, many organizations raised their capacity in terms of their trading volume of digital assets. Sotheby’s created its own virtual platform, called "Metaverse", and expanded its services in the digital art business. By so doing, the company took its place in the crypto art world and enabled NFT trade for its users. Additionally, back in March, Banksy’s screen-print, titled "Morons" (2006), was videoed while physically burnt and later sold as an NFT for $380,000, fuelling a critique of digital tokens at that time. However, digital files proved themselves by the end of the year with the sales of "The Merge" by Pak. In December, this work of the artist collective was sold on Nifty Gateway, a specialized platform for NFTs, for a total of $91.8m.

It is probably too early to predict the extent to which this new technological phenomenon will alter the financial terms of the existing arrangements of the art market. Still, we can safely say that there is a respectable amount of demand for the new form of digital works, and NFTs will most likely be on the collectors’ agenda in the coming years. It is also expected that cryptocurrencies will be an alternative payment method in line with more conventional currencies, as the blockchain industry has gained ground and earned the trust of its users over time.

Digitalization is not merely about the works themselves but also the institutional and consumer behaviour. The pandemic and the extended lockdowns have positively pushed the digital transformation of the market. The online sales have increased to a degree that narrows the gap between offline and online transactions. There is an upward trend in the rates of online buyers as well. Overall, we are yet to see the full capacity of the digital art market in general and must be ready for new developments.

Written by Busra Hasboyaci, EduArt Experience Correspondent from London.

Image: Beeple, EVERYDAYS: THE FIRST 5000 DAYS, 2021. © Christie’s Images Limited 2021.