As the NFT craze cools, auction houses strive to seek breakthroughs in the encryption field

With the rise in the prices of Bitcoin and Ethereum, those in the art world who once had high hopes for cryptocurrency are once again stirring. Nevertheless, there are still differences of opinion within the industry regarding this trend.

Some pioneers have made progress in this field. Next month, an auction house will allow payments in ETH or BTC for an entire physical auction for the first time in Saudi Arabia. The auction items include contemporary art from the West and Saudi Arabia, luxury goods, and jerseys from sports stars. This auction will also feature a generative "AI data painting" created by Refik Anadol, with the piece "Machine Illusion - Space | Chapter Two: Mars" estimated to be valued between $800,000 and $1,200,000.

The rise of non-fungible tokens (NFT) has brought a new wave of cryptocurrency millionaires to the art market. In 2021, major auction houses began accepting cryptocurrency for the purchase of certain physical artworks. Among them, Beeple's "Everydays: the First 5000 Days" was sold for a high price of $69 million, with the buyer being Vignesh Sundaresan, founder of the crypto investment fund Metapurse.

However, not everyone welcomes the impact of cryptocurrencies. Some industry insiders believe that after shaking off the turmoil caused by cryptocurrency speculators, the market atmosphere has become more stable. In addition, the young image of cryptocurrency buyers does not align with the lack of diversity in the art auction market, and new entrants are often viewed with suspicion.

Concerns about the use of cryptocurrency mainly focus on the risks of money laundering. To this end, the European Union has tightened anti-money laundering and anti-terrorist financing regulations for businesses providing services related to crypto assets. Auction house compliance teams also take a cautious approach to cryptocurrency.

Although the NFT market has lost much of its heat, experts are cautiously optimistic about its prospects as the market improves. A certain auction house stated that the average age of its NFT buyers is 42, lower than the 54 years of traditional auctions, which aligns with its strategy to attract the younger generation.

The art market has been in a slump in recent years and urgently needs to inject new vitality. According to data, the total auction volume of major auction houses has continued to decline over the past two years. In this situation, auction houses may have to consider joining the encryption cryptocurrency scene to seek new growth opportunities.