As the NFT craze fades, top auction houses bet on Crypto Assets

As the prices of Bitcoin and Ethereum hit new highs, interest in Crypto Assets within the art world is reviving. Although the previous NFT craze has waned, traditional auction houses are still actively exploring the application of Crypto Assets to attract a new generation of buyers.

Next month, a well-known auction house will hold its first physical auction in Saudi Arabia that accepts ETH or BTC payments. This marks the first time that traditional auction houses support Crypto Assets payments across all live auctions. The auction will showcase 119 lots, including contemporary art from the West and Saudi Arabia, luxury items, and sports memorabilia.

In fact, before the COVID-19 pandemic, the art market struggled to attract people from the tech industry. The rise of NFTs provided an opportunity for some new cryptocurrency elites to enter the art market. In 2021, several top auction houses began accepting cryptocurrency for the purchase of certain physical artworks, after an NFT piece was sold for a staggering $69 million, causing a sensation.

Subsequently, eligible physical works also began to lean towards technological aesthetics. Each renowned auction house has launched its own exclusive NFT and digital art platform. For the art market, practitioners hope that NFTs and related alternative coins can broaden the channels for new buyers to enter the high-end art sector.

However, not everyone welcomes the impact of Crypto Assets. Some believe that the turbulence brought by Crypto Assets speculators has passed, and the market is returning to stability. The image of Crypto Assets mainly targeting young buyers does not align with the current lack of diversity in the art auction market. In addition, newcomers are often viewed with suspicion, which is related to the conservative and closed nature of the art market.

Deeper concerns revolve around the possibility that Crypto Assets may be used for money laundering. Some countries have already implemented regulations tightening the oversight of Crypto Assets services. Compliance teams at auction houses are also cautious about Crypto Assets, with only a few auction items meeting the conditions for using Crypto Assets.

Nevertheless, as the market improves, the NFT market is still expected to see a turnaround. Surveys show that 12% of experts hold an optimistic view on the performance of NFTs this year, although it is far lower than previous highs, it is already twice that of last year.

A certain auction house stated that the average age of its NFT buyers is 42, lower than the average age of 54 for all auctions. This aligns with the auction house's strategy of positioning its business towards the younger generation, as the new CEO emphasized the need to "protect cultural heritage while focusing on innovation to attract new audiences, regions, and technologies."

In fact, the art market has remained sluggish for the past two years and is in urgent need of fresh blood. According to statistics, the total auction volume of several top auction houses has continued to decline in 2023 and 2024. Against this backdrop, as the Crypto Assets market heats up again, auction houses must also prepare to embrace this new trend.