August 27, 2023 - 7:30pm
Remember when celebrities were paying hundreds of thousands of dollars for pictures of cartoon monkeys? The “Bored Ape” craze, promoted by the likes of Justin Bieber and Paris Hilton — not to mention the prestigious Sotheby’s auction house — marked a high point for the crypto assets known as NFTs, touted as a fashionable new frontier in art collecting.
Today, the Bored Ape images have lost almost 90% of their value from their 2022 peak, and investors are suing Sotheby’s, Bieber, Hilton and others for misleading them.
The NFT massacre is only one dramatic sign of a wider unease taking hold of the art market. For months there have been ominous reports of cooling demand at auctions and fairs. In June, the flagship modern and contemporary auction at Christie’s took 66% less than the previous year, and even highly bankable artists such as Willem de Kooning and Jean-Michel Basquiat have been struggling to find buyers.
Do these jitters simply reflect the general turbulence in the economic climate? Yes, but also no. As the latest report by Art Basel and UBS confirms, the art market has become dependent on a super-rich class of investors who are largely immune from fluctuations in the wider economy. Global sales actually increased last year, coming close to their 2014 peak of $68.2 billion, but this growth was driven by the most expensive artworks and the most successful dealers. The lower echelons of the market stagnated or declined.
The NFT collapse illustrates the demise of aspirational but merely affluent collectors, who have been stung by falling tech stocks, crypto crashes, inflation and rising interest rates. By contrast, as the Art Basel/UBS report notes, global billionaire wealth has increased by more than a third over the course of the Covid pandemic and ensuing economic turmoil.
These ultra-high-net-worth individuals — increasingly drawn from the Middle East, Far East and Africa, as well as Western countries — have reshaped the art industry since the 2008 crash. Their exclusive tastes, mediated by a globetrotting circus of elite galleries, dealers, advisors and artists, determine what is considered valuable.
And yet the distress signals of recent months suggest this reliance on the wealthiest collectors has only forestalled the inevitable reckoning. There simply aren’t enough of them, or of the works they crave, to provide continuous growth. “Once someone has their de Kooning, they don’t necessarily want to buy another,” commented one art advisor after this summer’s disappointing Christie’s auction.
This partly explains why it is no longer unusual for contemporary artists to fetch big sums at auction while they are still alive. The money needs somewhere to go. But such speculation on faddish works will likely lead to heavy losses down the line (recall how Damien Hirst’s prices plummeted after 2008). Meanwhile, governments have been cracking down on money laundering via artworks, removing one of the biggest incentives for the super-rich to collect them.
As these pressures continue to mount on an increasingly hollowed-out market, it’s not difficult to see how a crash could come about. The financial value of art is ultimately a matter of confidence, and it only takes a few dire auctions for the panic to spread.
Wessie du Toit writes about culture, design and ideas. His Substack is The Pathos of Things.
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SubscribeWell, the mess hanging on the wall in the lead photo for this article is NOT art. It is an example of an alternate currency which operates solely for the benefit of investors, “art” critics, and the producers of this junk who are laughing up their sleeves all the way to the bank. Contemporary “Art” is the graphic equivalent of the Emperor who had new ( i.e., no ) clothes. A child could point out the absurdity that adults revel in.
Well said Sir!
As the author of this piece says: well, yes and no. Yes, i agree there’s a shedful of “on trend” nonsense being produced and consumed by those with more money than they know what to do with; or those who’re looking to make specific ‘political’ points which may – but almost certainly won’t – survive beyond a very limited lifespan and audience.
And no: because consider this (and i have skin in the game here). Reproduction of the natural world isn’t enough for someone who paints, sculps or draws seriously, since there are established means of recording the “visible”. But in fact, it never has been enough. Even the great artists from the Early Renaissance such as Giotto, Uccello and then such as Botticelli and Titian were seeking for something beyond the visible – something that seeks to portray the human spirit, just as the earliest cave painters sought to do. The best of contemporary art, and that which will survive the fads and trends of both the age and the art market, seeks to do the same. It’s something beyond words, and quite possibly one of the most difficult things to achieve, especially as the world grows ever more complex and insistent on the “here and now”.
Such work may not necessarily accord with your taste. It may or may not be abstract, but when we’re commenting on here we’re very often engaging in abstract thought. What’s important is the result having something with insight and potential to enhance ourselves and whereas words don’t have a physical form, the production of an object that can enhance us all as human beings can have great and lasting impact. It’s not to be mistaken for what the art market deems fashionable.
Well said Sir!
As the author of this piece says: well, yes and no. Yes, i agree there’s a shedful of “on trend” nonsense being produced and consumed by those with more money than they know what to do with; or those who’re looking to make specific ‘political’ points which may – but almost certainly won’t – survive beyond a very limited lifespan and audience.
And no: because consider this (and i have skin in the game here). Reproduction of the natural world isn’t enough for someone who paints, sculps or draws seriously, since there are established means of recording the “visible”. But in fact, it never has been enough. Even the great artists from the Early Renaissance such as Giotto, Uccello and then such as Botticelli and Titian were seeking for something beyond the visible – something that seeks to portray the human spirit, just as the earliest cave painters sought to do. The best of contemporary art, and that which will survive the fads and trends of both the age and the art market, seeks to do the same. It’s something beyond words, and quite possibly one of the most difficult things to achieve, especially as the world grows ever more complex and insistent on the “here and now”.
Such work may not necessarily accord with your taste. It may or may not be abstract, but when we’re commenting on here we’re very often engaging in abstract thought. What’s important is the result having something with insight and potential to enhance ourselves and whereas words don’t have a physical form, the production of an object that can enhance us all as human beings can have great and lasting impact. It’s not to be mistaken for what the art market deems fashionable.
Well, the mess hanging on the wall in the lead photo for this article is NOT art. It is an example of an alternate currency which operates solely for the benefit of investors, “art” critics, and the producers of this junk who are laughing up their sleeves all the way to the bank. Contemporary “Art” is the graphic equivalent of the Emperor who had new ( i.e., no ) clothes. A child could point out the absurdity that adults revel in.
Nothing is heading for a crash. Everything is fine. Be about your business, citizen.
Nothing is heading for a crash. Everything is fine. Be about your business, citizen.
You might conclude that anyone dull enough to think an NFT was ever anything, surely needed his money removed from him – stands to reason it could be put to better use elsewhere.
The more concerning thing tho, is concentration of wealth among only a very few collectors.
In my area, there were ‘incubators’ where people lived in workshops in close quarters with other ‘innovative’ people. The idea was I guess, that put together, they’d generate new and exciting product prototypes that we all want.
But most of the things they make are handcrafted or use complicated versions of 3-D printing and other expensive, time-heavy processes, and only get noticed if a collector or celebrity buys one.
Obviously, 99% of the time this doesn’t happen. If you forage through skips in my suburb, you’ll find some very interesting stuff.
As this has come to pass, the ‘innovation hubs’ are degenerating into what they actually physically are – converted factories with too many people shoehorned in, and which are not compliant with building regulations, lacking sufficient toilets, bathrooms and cooking facilities. And errr, fire exits.
Slums, in a word.
You might conclude that anyone dull enough to think an NFT was ever anything, surely needed his money removed from him – stands to reason it could be put to better use elsewhere.
The more concerning thing tho, is concentration of wealth among only a very few collectors.
In my area, there were ‘incubators’ where people lived in workshops in close quarters with other ‘innovative’ people. The idea was I guess, that put together, they’d generate new and exciting product prototypes that we all want.
But most of the things they make are handcrafted or use complicated versions of 3-D printing and other expensive, time-heavy processes, and only get noticed if a collector or celebrity buys one.
Obviously, 99% of the time this doesn’t happen. If you forage through skips in my suburb, you’ll find some very interesting stuff.
As this has come to pass, the ‘innovation hubs’ are degenerating into what they actually physically are – converted factories with too many people shoehorned in, and which are not compliant with building regulations, lacking sufficient toilets, bathrooms and cooking facilities. And errr, fire exits.
Slums, in a word.
I don’t know who decided that these splotches which look like they were done by a kindergarten class are art, but if billionaires want to spend their money this way, fine by me. I have no intention of buying, collecting or even viewing what is called modern art, thank you very much.
I don’t know who decided that these splotches which look like they were done by a kindergarten class are art, but if billionaires want to spend their money this way, fine by me. I have no intention of buying, collecting or even viewing what is called modern art, thank you very much.
The art market is of no importance. It does not impinge in any way on my interest in art. My view of modern art generally aligns with the sentiments previously expressed. I did once visit the Saatchi gallery and was back on the street in 15 minutes. I recently visited The Queen’s house at Greenwich to see the works of the Van De Veldes, father and son. How did dad do that with (presumably) just a quill pen? Remarkable. Not crowded, perhaps because it was free. It’s on until Jan 24.
However I do not align myself with a previous viewpoint. I will continue to wade through the endless modern art dross for the occasional gem that pops out.
The art market is of no importance. It does not impinge in any way on my interest in art. My view of modern art generally aligns with the sentiments previously expressed. I did once visit the Saatchi gallery and was back on the street in 15 minutes. I recently visited The Queen’s house at Greenwich to see the works of the Van De Veldes, father and son. How did dad do that with (presumably) just a quill pen? Remarkable. Not crowded, perhaps because it was free. It’s on until Jan 24.
However I do not align myself with a previous viewpoint. I will continue to wade through the endless modern art dross for the occasional gem that pops out.