Digital artworks connected to Blockchain-powered smart contracts known as NFTs (non-fungible tokens) had a brief, spectacular bull run.
The daily number of active digital wallets—in theory, the number of people who bought and sold NFTs connected to artworks—spiked nearly 1,500%, from 143 on Jan. 28 to 2,215 on March 17, according to the market tracker Nonfungible.com. By June 30, that number had sunk 58%, to just 932.
Daily sales, from a dollar perspective, peaked even earlier, on Feb. 1, when people spent about $7 million on art NFTs. By June 30, Nonfungible reports, totals had fallen to around $1 million. (Nonfungible doesn’t include auction house sales, so the famous $69.3 million Beeple NFT sale at Christie’s in March does not count in the data.)
And yet, in the face of what appears to be an indifferent and dwindling group of NFT collectors, the fine art world continues to announce new NFT-related projects.
The celebrity auctioneer Simon de Pury has “curated” an auction of NFTs by the artist Philip Colbert; Jay-Z commissioned an NFT from the artist Derrick Adams and is selling it at Sotheby’s; the New York gallery Sperone Westwater just opened a show that includes NFTs alongside traditional paintings. And now, the mega gallery Pace, which previously dipped its toes in the water by selling an NFT series by the Swiss artist Urs Fischer, is diving head-first into the market with four separate NFT projects.
“We have an art world that’s really closed, and yet its audience is exploding,” says Marc Glimcher, Pace’s president. “Those two things are incompatible, and that has to change.”
NFTs, he believes, might be a tool to effect that change. “What we think is the most transformative change in the business model is that millions of people are spending a couple of dollars, rather than a couple of people spending millions,” he says.
Glimcher cheerfully acknowledges the market’s lackluster trajectory and remains undaunted. The numbers don’t show millions of people buying NFTs, after all; they show thousands, and there’s no indication that will change. “Some people are living in the Metaverse,” he says. “Do many more people want something to hang on their wall? Of course, I don’t see any mutual exclusion there, but I do see some behaviors of a new generation starting to be manifested.”
Global NFT Program
And so, Pace is committing, at least in the short term, to digital art NFTs.
This September it will launch its own platform through which to sell its artists’ NFTs. The aim, Glimcher says, isn’t about competing with such NFT marketplaces as Nifty Gateway and OpenSea; it’s more about controlling the environment and interface in which the gallery’s art is presented. As an added bonus, it will help Pace control the prices of its artists’ markets.
“Our traditional primary root of sale is the private sale,” he says. “For many generations, that’s introduced [market] stability, because even if an artist’s painting sells for $10 million at auction, we’re still selling it for $1 million on the primary market.”