An NFT sells for US$69m, blasting crypto art records

Sale is latest in whirlwind boom in the market for this medium; hefty price tag is unprecedented for a new artist

ON THURSDAY, a digital artwork less than a month old sold for US$60.25 million at Christie's in New York, shattering every previous record set for the medium and pushing the NFT market into the price range of blue-chip masterworks. With buyer's premium, the total comes to US$69.3 million.

A spokesperson for Christie's declined to name the buyer. Initially it had appeared Justin Sun, founder of cryptocurrency platform Tron, gave the winning bid of US$60.25 million according to information provided by a Tron representative.

Later, the statement was clarified to say he was outbid at the last minute. Prior to the sale, Noah Davis, a specialist at Christie's who organised the sale, said that "there have been a handful of really dogged, really serious clients pursuing it, and they are mostly people who are very steeped in crypto.

"Whether that means they're early investors in crypto, or they run and operate businesses that have significant investment in crypto technology," he continued, "they're all very savvy, '#online' people."

Roy Liu, head of business and corporate development at Tron, said via e-mail: "NFT is definitely a revolution for our generation. Both Justin and Tron Foundation are super excited for the technology and will heavily support the ecosystem development around that."

The artwork

Everydays: the First 5,000 Days is a mosaic of every image that artist Mike Winkelmann, who goes by the name Beeple, has made since 2013. The artwork is attached to a non-fungible token (NFT), a digital certificate of authenticity that runs on blockchain technology.

Unlike some of his other artworks, Everydays doesn't come with anything physical (a box, a plaque) attached. Bidding opened at US$100 on Feb 25.

"The first day of bidding was one of the most magical events in my auction career," said Mr Davis. "I've never seen anything like it."

In the first eight minutes of bidding, he says, about 20 bidders pushed the work to US$1 million. "Only three (of the bidders) were known to us previously."

The sale's final minutes were even wilder, with bidding and drama that unprecedented in modern auction history.

The closest analogue would be the extended bidding that pushed the price of a work by Leonardo Da Vinci to US$450 million at Christie's in 2017.

But that was in an auction room, with an auctioneer, and live bidders. The fight for Everydays, in contrast, existed exclusively online, and percentage wise at least, had last-minute leaps familiar to anyone watching a hotly contested eBay lot.

An hour before the sale closed, bids were floating at about US$14 million; in the last 10 minutes the price jumped to US$22 million, then US$27 million, then to US$35 million, and then, when there were just second left on the clock, to US$50 million, and then a staggering $60 million.

The official hammer was US$60.25 million, plus an extra US$9 million for Christie's.

Paying with cryptocurrency

When Christie's announced the sale last month, it made waves when it revealed that it would accept cryptocurrency as payment; the caveat was that the buyer's premium had to be in a traditional currency. But as the days went on and people continued to push the price even higher, that policy changed.

"We are accepting (a buyer's premium of) Ethereum for this purchase," Mr Davis said. "I feel like that's actually the biggest deal of this whole thing, secretly."

Speaking a day before the sale closed, he said he was "90 per cent sure" that the final buyer would be paying in cryptocurrency. Christie's didn't immediately confirm if that was the case once the sale concluded.

Given the wild volatility of cryptocurrencies, Christie's may be taking a risk accepting its premium in Ethereum. The second-biggest digital coin lost 50 per cent of its value on Feb 22, sinking as low as US$700. As of 10.11am EST on March 11, Ether was trading at US$1,815 to the dollar, a roughly 160 per cent growth over the prior week.

'The market decided'

This sale is the latest in a whirlwind boom in the market for NFTs. Beeple's previous record was set in late February, when a work that someone had purchased just months earlier in October for US$66,000 sold for US$6.6 million - a 9,900 per cent growth. Before that, his record stood at US$777,777.777, which was set in January. A year before that, he hadn't sold a single artwork.

"We let the market decide what it's worth, we didn't push anyone to bid US$60.25 million," said Alex Rotter, Christie's chairman of 20th and 21st century art. "People want Beeple, and the market decided."

"Sixty-nine million dollars in the context of the traditional art market," he explained, "would be the top piece in most auctions - the top artwork in any sale."

Indeed, the US$69 million price tag isn't just an unprecedented price for an NFT, it's also an unprecedented price for a new artist. For contrast, major works by giants of art history such as Vincent Van Gogh and Picasso saw respective sales of "only" US$16 million and US$15.6 million recently.

Everydays is now the third-most expensive artwork by a living artist to sell at auction - ever. Only a sculpture by Jeff Koons and a painting by David Hockney are in front of it on the list. The difference, though, is that those two artworks were sold by collectors, meaning that Hockney and Koons didn't get a cent. Everydays, in contrast, was consigned by Beeple himself, meaning he will receive all of the US$60 million hammer price.

Mr Davis said this is just the beginning. "It's a huge shot in the arm for the business generally, when you have a sale result like that," he said. "I think we will have really compelling and exciting NFT-based art opportunities at Christie's in the near future." BLOOMBERG

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