Personal social avatar NFTs, which can show the owner’s taste and aesthetic preferences, making the person who purchased the piece also unique online. Therefore, NFT artworks are gradually accepted and needed by people.
After the biggest drop in a decade in 2020, global art market sales finally saw a strong recovery in 2021. The latest Art Basel and UBS Global Art Market Report (hereinafter referred to as the “Report”) released a few days ago shows that the global art market will record a total sales value of US$65.1 billion in 2021, an increase of 29% over 2020. .
Irish economist Dr Clare McAndrew and his Arts Economics team have surveyed hundreds of international galleries, art dealers, auction houses and more than 2,000 high-net-worth art collectors from around the world over the past year. The market performance, art auctions, art fairs, gallery sales and other aspects of each region are analyzed and sorted out to form this report.
China is once again the second largest art market in the world
The report shows that the U.S. art market continues to maintain its leading position, with its share of global art market sales rising slightly to 43%. Thanks to the strengthening of the RMB, strong auction performance, the continued growth of the gallery industry, and the continuous development of China’s art infrastructure, the Chinese art market will account for 20% of global sales in 2021, rising to become the world’s second largest art market again. market. The United Kingdom fell to third place, accounting for 17% of global sales.
In 2021, public auction sales of art, ornaments and antiques are estimated to reach $26.3 billion, up 47% from 2020, thanks to the availability of high-quality works on the market and the influx of new buyers. Private auctions continued to boom, with an estimated 32% increase to nearly $4.1 billion, surpassing the $3.1 billion reported in 2020. The U.S., China and the U.K. maintained their lead in public auction sales, with the three together accounting for 78% of the global market. Among them, China is the largest public auction market, accounting for 33% of the global market – although down 3% year-on-year, it is still slightly higher than the United States, which accounts for 32%.
After recording a 20% decline in 2020, total art dealer sales in 2021 rose 18% year-over-year to $34.7 billion, still below 2019 levels. As art fairs resume in 2021, sales at art fairs, including online galleries, rose to 29%, even with fewer fairs and limited attendance. However, due to the fact that art activities have not yet fully resumed and the consideration of participation costs, the number of art dealers participating in art exhibitions in 2021 is still less than before the epidemic.
The online art exchange market continues to grow, growing slightly by 7% in 2021 to an estimated $13.3 billion in sales. Although online sales will account for 20% of the total market sales in 2021, which is down 5% year-on-year in 2020, it is still more than double the 2019 level (9%). The decrease in the proportion of online sales was mainly due to the resumption of sales activities at some physical exhibitions, and the proportion of online and offline sales of dealers tended to balance again. Top auction houses continued to introduce new models last year, investing heavily in improving the quality and efficiency of live auction platforms and online-only auction platforms – live auction platforms achieved a number of major transactions during the year, making auction transactions more difficult. It can be carried out more continuously throughout the year, rather than the traditional seasonal sales cycle of spring and autumn auctions.
When NFT art is in progress
NFT art works will usher in explosive development in 2021, so this year’s report also discusses the issue of NFT in depth for the first time. The total sales of NFT artwork and NFT collectibles (including NFT works of sports, music, games, etc.) have skyrocketed from $4.6 million in 2019 to $11.1 billion in 2021. In 2021, 74% of surveyed high-net-worth collectors have purchased art-based NFTs, with a median spending of $9,000 per capita.
NFT art sales will enter the auction realm of the traditional art market in 2021, although the value generated so far is still limited. Christie’s NFT sales totaled $150 million last year, and Sotheby’s NFT sales are $80 million in 2021. However, the listing of NFT works has successfully attracted many young buyers and new buyers to the auction house.
Regarding the rise of NFTs and the changes of NFT artworks in the primary and secondary markets, the 21st Century Business Herald reporter conducted an exclusive interview with the chief author of the report, Dr. Clare McAndrew. Ask her to analyze the reasons for the sudden popularity of NFT art in 2021 and her observations on the NFT art market, and discuss the trend of the global art market in 2022.
“21st Century”: The report mentioned that as early as 2018, people’s interest and exploration in NFT art trading had begun to emerge, but it was not until March 2021 that Beeple’s works were auctioned for sky-high prices, and NFT art was not widely publicized. Follow and discuss. Why did 2021 end up being the year of the full rise of NFT artwork?
Clare McAndrew: I think it’s a combination of factors. On the one hand, the “popularity” of NFT artwork is related to the development of technology and the market itself. It follows the principle of gradual progress, and has matured in recent years. In 2014, when NFTs first appeared, they were just a simple virtual collection, the product of a certain “small circle”. In 2017, as the technology became more mature, more NFT sales platforms and gameplays appeared, such as: the earliest blockchain cat raising game CryptoKitties and the pixel avatar CryptoPunks. In 2018, as NFT transactions became more and more frequent and the forms became richer and more diverse, it naturally attracted more people to participate in it. In 2021, after Beeple’s “Everydays: The First 5000 Days” sold for nearly $70 million at Christie’s, NFT artworks entered the public eye. A large number of artists have created a large number of works, and more platforms provide conditions for trading NFT artworks. The market runs after artists and works, so it is always late. Therefore, the supply and demand of NFT artworks will only increase significantly in 2021.
In addition, due to the epidemic, people are allocating more attention online. Usually, when people own a piece of physical art, they show it to their friends, family and colleagues, or put it at home for guests to see. But the pandemic has made that impossible. Therefore, online art collections are especially important for people who have moved their lives, socialization and work online. Personal social avatar NFTs, in particular, can reveal the owner’s taste and aesthetic preferences, making the person who purchased the piece also unique online. Therefore, NFT artworks are gradually accepted and needed by people.
“21st Century”: Data shows that in 2020, most of the total sales of NFT art (75%) will come from direct sales; in 2021, most of the total sales of NFT art (73%) will come from second-hand resale. Why does this change occur?
Clare McAndrew: In 2020, artists are still in the stage of getting their heads down and creating their work. By 2021, our statistics show that the average time between when NFT art is first purchased and when it is resold second-hand is only 33 days. In other words, a piece of NFT art is traded about once a month. The average resale time of a work in the traditional art market is generally 25 to 30 years. Compared with traditional art transactions, the anonymity of NFT art transactions means that the barriers to entry for buying or selling are very low; coupled with the fact that it can be traded anytime, anywhere, high liquidity and continuous transactions attract many speculative buyers entry. There are many speculators who buy NFT art based on the criterion of “whether the work can be resold at a higher price”, they have little interest in the content and the art itself, and only hope to make a profit by quickly changing hands.
“21st Century”: In these transactions, what is the approximate proportion of the real demand for NFT artwork and the market bubble?
Clare McAndrew: I can’t give a specific number because we can’t tell what motivates people to buy NFT art. But judging by the changing segment of the market, and the shift in the percentage of direct sales versus resale, I think a significant portion of those deals are speculative. Our report also mentioned that in addition to the purely speculative nature of many transactions, the highly profitable and unregulated NFT transactions also allow some dubious “grey” practices to take advantage. For example, last year someone drove up the market price of a piece of NFT art by manipulating multiple accounts under his own name to sell each other. Many such false and illegal transactions are mixed in the sales of NFT artworks in 2021.
21st Century: Please talk about the development trend of the global art market in 2022.
Clare McAndrew: In my opinion, the global art market in 2021 has not really fully recovered, it is a “recovery” halfway through, and the current art activity has not returned to full capacity, so everyone is Looking forward to a better year ahead. In December last year, when we completed the end-of-year survey, we found that everyone’s attitudes and predictions for the new year were very positive and optimistic. Galleries, auction houses, and collectors are all very optimistic about future sales, and many are looking to sell or buy new works of art.
A lot of things have happened this year, adding uncertainty to the outlook for the art market in the new year. Tensions between Russia and Ukraine have distracted many from focusing on the art trade. So even though last year we expected a positive, optimistic outlook for 2022, it seems that there are still variables. Obviously, we can expect economic fluctuations and inflation now, but consumers’ expectations for the future are still very variable. The situation in Russia and Ukraine will adversely affect people’s willingness to buy and sell artworks. It remains to be seen whether there will be improvements in the follow-up, and whether people think now is a good time to trade artworks.
Although the feedback from the survey at the end of last year is that the global art market is gradually recovering, I think the development trend of the global art market in 2022 remains to be seen.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/interpretation-of-the-basel-art-market-report-is-nft-art-a-bubble-or-a-new-favorite/
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