News & Insights Archives

THE SCOOP #4 – JUNE 21ST, 2022

In our 4th edition of The Scoop, we go over the latest crypto and NFT market news and must-attend NFT events this week in New York City.

CRYPTO MARKETS

CRYPTO COMMENTARY

There is red in the charts once again, and it’s hard to tell if the pain is over. Investors continue to be worried about the Fed’s ability to tame inflation without slipping into recession or to achieve a so-called soft landing. While markets initially reacted positively following the Fed’s 75 bp rate increase, the upward movement was quickly reversed, and all major indices fell further. Volatility, as measured by the VIX index, has been persistently above 30, which is more than double the level a year ago, with investors indicating the volatility is here to stay. What is evident is Bitcoin and major stock indices have decoupled after several months of moving in step with each other. With Bitcoin breaking below the key support level of $20,000 on Friday, which was widely speculated to be a bottom, the door is open for an even larger drop. As of the end of last week, the total crypto market cap stood at around $910 billion, down from its high of $3 trillion in November last year.

There has been further carnage in the crypto exchange and lending industries: Celsius, one of the largest lenders in the crypto space, has frozen transactions amid the tumble. It remains to be seen how they are going to navigate this situation. There are rumors Celsius may be insolvent and unable to repay their users, with liquidity issues stemming from staked Ethereum, a derivative of Ethereum that is significantly more sensitive to large selloffs than its base blockchain. 3AC, short for Three Arrows Capital, has also become entangled in this downward spiral. The Dubai based crypto fund has seen liquidations by its lenders of about $400 million after sustaining large losses from the Terra Luna crash. Both firms are hanging in the balance with their moves being closely watched. Their failure could create another ripple in the crypto markets very quickly. Coinbase also announced it was laying off 18% of their workforce, with the CEO stating it was in preparation for a recession and “crypto winter.”

Bitcoin woes have hit outside the crypto world, causing losses for companies in unrelated industries that had invested excess cash in crypto. While Tesla may have reportedly lost about $500 million in its Bitcoin holdings, the loss is manageable for company of its size. The story is more complicated for MicroStrategy, a tech company providing business intelligence, mobile software, and cloud-based services to its clients. Microstrategy has Bitcoin holdings double that of Tesla and purchased much of its holdings on a leveraged basis. Its unrealized losses are more than $1 billion. While facing a potential margin call, Microstrategy’s CEO Michael Saylor is holding strong while predicting a bumpy road ahead. Taylor is tagging his tweets with the infamous #HODL. In the crypto space, this is a typo of the word “hold” that years ago had been adapted as an acronym for “Hold On for Dear Life.” For the current landscape, there is nothing more fitting.

WHAT’S THE BUZZ?

Staking, and everything you need to know about it.

STAKING

Staking is the way many cryptocurrencies verify their transactions.
For an investor, staking is a way to use crypto holdings to earn additional rewards, akin to passive income on other financial assets such as interest or dividends.
Dependent on the cryptocurrency, the validation processes are called proof-of-work or proof-of-stake.
Each of these validation processes help the network achieve consensus, so that all transactions align.
Tokens that are staked are locked and cannot be traded.

NFT BLUE-CHIP COLLECTIONS

Top 5 Collectible Collections

Top 5 Photography Collections

NFT COMMENTARY

The NFT markets have not been immune to economic turmoil. Many collections have seen their values tumble over the past months. Performance for some of the top collections is summarized below. Obviously, some of these losses are steep, especially with the downturn in Ethereum factored in (down 67% since April 3, 2022).

_{Source: Opensea; based on average daily prices}

NFTs seem to thrive on stable blockchain prices, which is not the current landscape. Instead, they are behaving similarly to leveraged assets which are more volatile in nature. This means that when Ethereum goes down the dip is greatly magnified in NFT prices. We’ve seen volume rise in the blue-chip collections like Bored Ape (shown below), which is evidence of the market consolidating behind the safest bets.

_{Source: OpenSea, Bored Ape Yacht Club Activity}

Perhaps one of the biggest recent surprises is the rise of free mint NFTs. Free mint NFTs are when there is no cost for the creation of the NFT, but the NFT purchaser must pay gas fees for the blockchain network. Goblintown, a free mint NFT collection, sits at the top of the chart currently and nobody can seem to pinpoint how they’ve gone from zero cost to a 3 Eth floor price, with a peak of over 7 Eth in a bear market with little more than cultural zeitgeist. The pullback in all other assets seems to have pushed the free mint and the community rallied behind it. The art is nothing to show off and there isn’t any utility. While it has created value for many of those that got in for the cost of gas at the beginning, it is hard to have confidence in a project that doesn’t seem to offer much. We’re either seeing a paradigm shift or a flash in the pan. It will be interesting to watch this project unfold.

NFT NYC

There is a plethora of events next week from the NFT NYC conference to Apefest and Christie’s Cartography of the Mind. We’re excited to take part in the largest NFT gathering yet! With pop-ups happening around the city, trying to hit every event seems impossible, but here are a few of the speakers and must attend events we’re excited about.

June 20^th

Time Pieces NFT – An NFT collection by Time Magazine is hosting multiple events

NFTSea: A gallery of curated works from the Time Magazine collection on display and open to the public from 1 – 10PM at iPic Fulton, 11 Fulton Street – One day showing
Rug Radio/FOTO Gallery Event: A photography focused gallery curated by the Rug Radio Team open to the public from 10AM – 7PM at Superchief Gallery – One day showing

June 21^st

NFT NYC Conference – Radio City Music Hall – Hosted by Coinbase (registration required)

How Best to take NFTs to the Public: Ivan Soto-Wright, MoonPay
Next-Gen NFTs: Jehan Chu, Kenetic Capital
NFT Ticketing: Brendan Lynch, Ticketmaster
The State of NFTs: David Pakman, Coinfund
The Future of Gaming with NFTs: Ryan Watt, Polygon Studios
NFT Art for Good: Artist Spotlight with MAPS and Christie’s – Refik Anadol, Sarah Meyohas, Noah Davis, Michah Howard-Dowbak, Ryan Zurrer, and Maciej Kuciara

Christie’s New York

Cartography of the Mind: The reception for a curated NFT sale to benefit MAPS – Open to the public with an RSVP, 4-7PM at Christie’s – Auction from the the 21^st – 28^th

_{VII. Wormfood by Sam Spratt for sale in Christie’s Cartography of the Mind}

June 22nd

Comp Stomp Studios

Feeling Blue Gallery: Curated by the renowned NFT artist Cath Simard – Open to the public from 8AM – 3PM at 70 Hester Street

NYC Photo Walk

Hosted by Photer: A walk hosted by some of the best photographers in the business to network over a casual photo stroll – Open to the public starting at 1PM at New York City Hall

June 23^rd

NFT NYC Conference – Edison Ballroom (registration required)

NFT Education for the Mainstream – Sheena Brooks, Kim Merke, Theo Sastre-Garau, David Allan, and Jeremy Fall
The Technology of Emotion: NFT Experiences are the Future – Arthur Carmazzi
Hospitality and NFTs – FlyFish Club with Conor Hanlon, Josh Capon, Andrew Wang, and David Rodolitz
Securing Your Digital Self – Sebastien Badault

NFT ARTIST SPOTLIGHT

Takashi Murakami

As a storied artist with a signature style that has spanned the fine and commercial art space and blurred the lines between low and high art, Murakami hardly needs an introduction. He has been on the traditional art scene since the early 90’s and taken part in many high-profile collaborations. As one of the few established fine artists playing in the NFT space, Murakami appears comfortable moving between the physical and digital art worlds, but this evolution hasn’t come without some painful lessons. After releasing his first collection Murakami.Flowers in April 2021, Murakami almost immediately suspended the sale, citing his lack of understanding the NFT market. There were whispers that his NFT sale was a result of his studios near bankruptcy at the onset of the pandemic.

After his initial rough start in the NFT space, in November of 2021 Murakami announced he was partnering with Nike’s RTFKT Studios to create their CloneX Avatars. These avatars are widely seen as a key part of the Metaverse that Nike is building.

Since entering the NFT space, Murakami has stated, “I was reborn.” He is at the center of the Nike ecosystem, and his financial woes should be in the past. In early May, Murakami relaunched Murakami.Flowers as a part of a new exhibition at Gagosian titled An Arrow through History. This new body of work translates the computer generated NFT art for both Murakami.Flowers and CloneX Avatars into handpainted paintings and sculptures. Talk about coming full circle! The show runs through June 25th at both Gagosian Madison Ave spaces.

_{Source: OpenSea, Murakami.Flowers Activity}

NFT & CRYPTO NEWS

READ PAST ISSUES OF THE SCOOP

Disclaimer

Information in this report is compiled from a number of sources; The Fine Art Group does not make any representation or warranty, express or implied, as to its accuracy or completeness. The Fine Art Group shall not be liable for any errors or inaccuracies in this report or for any actions taken in reliance on information or opinion contained in this report. The Fine Art Group are under no obligation to update or keep current the information provided herein. Information in this report is provided solely for information and marketing purposes and is not to be construed as investment advice or a personal recommendation, nor as legal, tax, regulatory, accounting or any other specialist technical advice. Capital is at risk when buying or selling the types of assets discussed in the report, and any decision to do so is solely at the risk of the buyer or seller. Prior performance is not indicative of future results. Neither The Fine Art Group nor any of its directors, officers, employees, or agents accepts any liability for any loss or damage arising out of the use of all or any part of this document or reliance upon any information contained herein.

The report contains hyperlinks or references to third-party advertising and websites other than The Fine Art Group website. Any such hyperlinks or references are provided for your convenience only. We have no control over third-party advertising or websites and accept no legal responsibility for any content, material or information contained in them. The display of any hyperlink and reference to any third-party advertising or website does not mean that we endorse that third-party’s website, products, or services. Your use of a third-party site may be governed by the terms and conditions of that third-party site and is at your own risk.

This year’s Art Basel has been fantastic as ever! The week started off with a bang at our annual dinner at Restaurant Kunsthalle. Our team was thrilled to meet so many new people and connect with old friends once again.

The company was good, but the art was better. This fair was not to be missed!

THE SCOOP #3 – JUNE 6TH, 2022

Welcome to the third edition of The Scoop! Read more for the latest news in crypto regulation, notable art sales, and NFTs and taxes.

CRYPTO MARKETS

Bitcoin to USD

Ethereum to USD

CRYPTO COMMENTARY

Traditional equity markets and crypto have been largely in sync during the recent weeks reacting to a mixed bag of economy statistics and Fed notes indicating consensus for 50 bp rate hikes in June and July. While day-to-day volatility continues, Bitcoin has stabilized around the $30,000 mark in recent days.

Crypto and fintech companies remain under pressure with the Gemini exchange announcing a 10% staff cut, citing a contraction phase in the industry, or “crypto winter,” further compounded by macroeconomic and geopolitical turmoil. This announcement follows upon an earlier earnings miss by competitor Coinbase whose revenues fell by 27% year-on-year. The collapse of terraUSD “stablecoin” (valued at some point at $60 billion) last month is still reverberating through the market. At the same time, Binance, yet another crypto exchange, announced its venture arm raised $500 million for a fund dedicated to investing in Web3 start-ups. This is on top of the new $4.5 billion fund launched by company Andreessen Horowitz for investments in crypto and blockchain companies. The venture capital firm is hoping to capitalize on opportunities during the bear market.

REGULATORY UPDATE

Regulation is clearly a hot topic in the crypto space and we’ve been keeping our eye on several lawsuits filed in the US which may result in a precedent on how cryptocurrencies are classified. Crypto issuers and trading platforms claim tokens are in essence commodities, such as gold, which have no federal regulator. While the SEC has been slow to provide any specific guidance, its enforcement actions have made it clear that many crypto tokens should be listed as securities and exchanges should be registered. To determine whether an asset is a security, regulators and courts apply a four-part test developed in a 1946 Supreme Court ruling over orange groves. Known as The Howey Test, it entails an investment of money in a common enterprise with an expectation of profits derived from the efforts of others. The Howey Test standard will no doubt be challenged in the class action suit filed against Coinbase claiming that 79 of the tokens listed on the platform are unregistered securities. While Coinbase filed a motion to dismiss the case, the recent rout in the cryptocurrency markets will likely not be helpful in their efforts, and we expect the litigation in this space to intensify.

As a further sign that government is stepping up its enforcement efforts in the crypto arena, the Department of Justice has charged a former manager at OpenSea with NFT insider trading. More on this here.

WHAT’S THE BUZZ?

Vitalik Buterin, the creator of the Ethereum network, recently coauthored a white paper that laid out the ground work for possibly the next big thing in Web3: soul bound tokens (SBTs).

SOUL BOUND TOKENS (SBTs)

As opposed to NFTs which can be bought, sold, and transferred, SBTs are with you forever and cannot be transacted upon.
They will not replace NFTs, but they will add another use case to the technology already in place.
A practical example of this concept would be a university granting a diploma to an individual in the form of SBT, residing within a digital incorruptible “resumé wallet” (an on-chain resume is proof of a person’s participation and experience in the crypto community).
For artists, it’s another lever to pull in the world of customization. SBTs open the door for artists to control who owns their art (e.g. a client or an institution commissioning a piece would not be able to deaccession the work without the artist’s express approval).

NFT BLUE-CHIP COLLECTIONS

The below are considered collections to watch based on overall volume and liquidity over the last 30 days. Click the links to see full lists on OpenSea.

Top 5 Collectible Collections

Top 5 Photography Collec tions

NFT COMMENTARY

Looking at the top collections we can see the floor prices have dipped for many of the high performers as the crypto and traditional market pullback has finally leaked into the NFT space. These collections initially had some staying power but ultimately could not avoid the gravity of events going on around them. While prices have dipped, the number of daily transactions on OpenSea over the last 30 days has slowly risen showing there is still an appetite from buyers which is positive.

Most recently, a CLONE X – X TAKASHI MURAKAMI by RTFKT NFT was set to be auctioned by Christie’s Hong Kong but with a lack of interested bidders, it went unsold. Seeing a piece get such a cold reception on this big of a stage is uncomfortable, especially when it was the only NFT in the sale. This avatar type PFP (picture for profile) is a rare piece in a collection of 9300 unique characters. While PFP collections have been some of the highest performers in the NFT space, only time will tell how they age compared to 1/1 art.

A high profile purchase by Jim Carrey has many talking. Carrey recently purchased his first NFT and took to Twitter to show it off. The piece Devotion by Ryan Koopmans is a video clip showcasing a Soviet era building being reclaimed by nature, with Carrey noting “this one stops me” in his tweet. The purchase price was 20.0 Eth. ($40,000).

_{The Wild Within – Devotion, Edition 1 of 1, by Ryan Koopmans}

Tax Talk

In our recent meetings with clients, we’ve been getting many questions on how NFT transactions are taxed. Obviously, tax treatment may vary from one jurisdiction to another. Moreover, there is not absolute clarity in this area and every investor should seek professional advice when reporting on related transactions. In the US, the IRS issued guidance on treatment of cryptocurrencies early on and confirmed they should be treated as property. As such, for most investors, any gain or loss on a sale involving cryptocurrency would be treated similarly to other capital assets such as stocks or bonds. However, no formal guidance was provided specifically for NFTs.

If the IRS determines that a particular NFT is “a work of art” and such “a collectible”, any related gain or loss from a sale, among other things, would be subject to a higher maximum capital tax rate than the one set for cryptocurrencies or other financial investments. Since many of the investors use their crypto holdings to purchase NFTs, the tax analysis becomes even more complicated as a purchase of an NFT for cryptocurrency triggers capital gain or loss on the underlying crypto holding. As NFTs come in all shapes and sizes, the debate as to what taxation applies to what kind of NFT will continue until the IRS issues specific guidelines for NFT transactions. We believe clarity on the tax front is critical in attracting new investors to this space and we will certainly be watching any developments very closely and reporting on them when appropriate.

More on this topic from these sources:

Forbes

Bloomberg

NFT ARTIST SPOTLIGHT

Chris Le

Chris Le is the lead designer behind Nike’s NFT Collection and co-founder of RTFKT, a digital assets creative firm. He has been designing digital assets in the gaming spectrum for quite some time through several different ecosystems, building and selling businesses along the way. More recently, his company RTFKT is behind Nike’s launch of CryptoKicks and a collection with Takashi Murakami called Clone X which is currently in the top 5 collections on OpenSea (despite the Christie’s auction not going well).

We recently had the pleasure of interviewing Chris for the Morgan Stanley Esports Conference about what he sees in the future for this space. His grand vision is that 10-15 years from now augmented reality will be a regular part of life, allowing us to interact with both the real and digital worlds seamlessly. There will be more than one metaverse, different ecosystems in the digital cloud, some working with others and some remaining standalone. These virtual worlds will open a new opportunity for businesses and creators alike to build whatever they can dream up within a new digital economy.

Le’s collaboration with Nike started with shoes, but he mentioned that was just the start, and that Le and Nike are developing a metaverse world for people to wear their digital shoes in on their avatars. According to Chris, the Web3 infrastructure for the future is being built now, and we can’t wait to see how his predictions play out.

_{CLONE X – X TAKASHI MURAKAMI by RTFKT Inc.}

NFT & CRYPTO NEWS

READ PAST ISSUES OF THE SCOOP

Disclaimer

Clients of The Fine Art Group and Christie’s came together in Los Angeles to celebrate the spectacular sale Old Masters, New Perspectives: Masterworks from the Alana Collection. Anita Heriot, President of The Fine Art Group, was in attendance. Over cocktails and dinner, guests enjoyed a preview of the collection and had the pleasure of learning more about key works by Fra Angelico, El Greco, and Orazio Gentileschi directly from Christie’s specialists.

The auction will be held Thursday, June 9th. Follow the link to view the collection and register to bid.

Old Masters, New Perspectives: Masterworks from the Alana Collection

The New York May Marquee sales concluded with around $2.5 billion worth of art sold across two weeks. With streams of new auction records and robust sell through rates, the market remains healthy against the backdrop of growing global economic and political uncertainties. There was, however, a sense of restraint compared to the frenzied bidding witnessed in the New York November 2021 sales. Moreover, four major single owner sales accounted for more than a third of these auction totals, proving they remain crucial to boosting volume.

_{Andy Warhol, Shot Sage Blue Marilyn, 1964. Courtesy of Christie’s.}

The first of these came at Christie’s with the Ammann Collection, the star lot of which was the Warhol Shot Sage Blue Marilyn (1964). Hammering at $170 million to Larry Gagosian, the work fell short of its unpublished $200 million estimate. With fees, however, it is now the second most expensive artwork sold at auction behind the Salvator Mundi attributed to Leonardo da Vinci. Gagosian further went on to buy two paintings by Cy Twombly for $16.9 million (premium) and $21 million (premium), and a pink Franz West sculpture for $592,200 (premium). Trade bidding was heavy throughout the sale with Iwan Wirth also competing on several lots, as expected for a dealer’s collection. Regardless, the sell through rate of 94% felt particularly strong with no works in the sale guaranteed. It became the second highest single owner sale for Christie’s at $317.8 million.

_{Franz West, Untitled (Lemur Pink), 2008. Courtesy of Christie’s.}

The second part of the Macklowe Collection at Sotheby’s was also a major contributor for the May sales totals, at $246.1 million (premium). Combined with the results from part one in November 2021, the $922 million (premium) total has become the most expensive single owner sale in auction history, surpassing the Christie’s 2018 Rockefeller sale. Whilst bidding and results were less strong than the first part, this is largely reflective of the content rather than signalling a dramatic market shift, although there was a sense of waning demand compared to the heat of November.

Two more single owner sales at Christie’s from the Impressionist & Modern genres punctuated the fortnight of auctions, including the collection of Fashion retailers Rosalind Gersten Jacobs and Melvin Jacobs. As a primary theme of this year’s Venice Biennale, the sale of this group of remarkable Surrealist works was exceptionally well timed, totalling $42 million (premium) against a pre-sale estimate of $19 – 30 million. The standout result was Man Ray’s Le Violon d’Ingres (1924) which sold for $12.4 million (premium) against an estimate of $5 – 7 million, making a new record for the most expensive photograph sold.

_{Man Ray, Le Violon d’Ingres, 1924. Courtesy of Christie’s.}

A group works from the Impressionist & Modern Collection of Anne H. Bass, also at Christie’s, saw healthy bidding for major paintings by Monet and Degas, whilst the two Rothko paintings both sold to the guarantor. The mood felt calmer compared to the hyperactivity during the recent Cox Collection auction, however, this is more reflective of the high price point of the lots, totalling $363 million (premium) across just twelve pieces.

The other sales of the week were broadly broken down into what has recently become the three main categories of the market, Impressionist & Modern, 20^th Century and then 21^st Century or ‘Ultra-Contemporary’. With intensity of bidding scaling up towards the latter genre, which has seen the largest market growth over the last two years. More than half of the lots in these sales were made up of female artists and several records were achieved across all three houses for artists including newly signed Gagosian artist Anna Weyant, Avery Singer, Yayoi Kusama, Simone Leigh, Christina Quarles, Howardina Pindell, Robin F. Williams and Lynne Drexler amongst others.

_{Anna Weyant, Summertime, 2020. Courtesy of Christie’s.}

Encouragingly there were also strong results for historically underrepresented artists including a major auction record for Ernie Barnes’s 1976 painting The Sugar Shack. The work performed well over its $150,000 low estimate at Christie’s in New York, selling for $15.3 million (premium) to Bill Perkins. A well-timed statement shortly followed this result, announcing that the estate of Barnes is now represented by two major New York galleries, Andrew Kreps and Ortuzar Projects.

Asian bidding continues to be a key factor which is helping to propel strong sale results, but the latest round of auctions demonstrated that this activity remains most zealous in the 21^st Century category, with less attention on more traditional lots.

_{Ernie Barnes, The Sugar Shack, 1976. Courtesy of Christie’s New York.}

Phillips, who have pioneered sales in this genre, reached a landmark moment with their highest sale total to date at $225 million (premium). This number was primarily driven by the sale of Yusaku Maezawa’s 1982 Basquiat. Acquired just six years ago from Christie’s for $57.3 million (premium), it sold for $85 million (premium), and is the most expensive work that Phillips has ever sold. The work likely sold to the guarantor as did a number of the top lots this season which were accompanied by bold estimates. This is a distinguishing trait which became apparent throughout the sales; bidding activity is thinning at the trophy level of the market in the current climate.

Regardless, with two fairs, TEFAF and Frieze, also opening during the same fortnight, the robust sell through rates and totals speak to a healthy market able to absorb the significant volume on offer. These were of course hugely supported by the substantial number of single owner sales, which will be vital in achieving similar levels of sales totals during future auction cycles.

_{Jean-Michel Basquiat, Untitled, 1982. Courtesy of Phillips.}

The Fine Art Group is honored to bring to market a curated selection from the extraordinary Alana Collection, to be sold at Christie’s New York on June 9^th.

Please join us for a panel discussion led by Christie’s specialists Jonquil O’Reilly and Ana Maria Celis and moderated by The Fine Art Group President Anita Heriot. We will take you through the most important lots in the sale and how Old Master Paintings form the bedrock of working practices of every contemporary artist today.

Being one of the most important collections of Italian Old Master Paintings, Sculptures, and Antiquities, The Alana Collection sale will be a once in a lifetime opportunity to acquire museum-quality masterpieces from the Early Modern era. Highlights include extraordinary pieces by some of the most renowned artists of Art History such as Fra Angelico, Orazio Gentileschi, El Greco, Lorenzo Veneziano amongst others.

DATE

Wednesday, June 1st – 12PM EST

FORMAT

Live webinar

LENGTH

1 hour

*Guests will receive a Webex calendar invite through their registered email

OTHER WAYS TO JOIN

https://fineartgroup.webex.com/fineartgroup/j.php?MTID=me55429aee33be65f0a70ff9e225af44f

Wednesday, June 1, 2022 12:00 pm | 1 hour | Eastern Time (US & Canada)

Meeting number: 2631 718 2962
Password: AzG3FiA5ix4

Join by video system
Dial 26317182962@fineartgroup.webex.com
You can also dial 173.243.2.68 and enter your meeting number.

Join by phone
+1-415-655-0001 US Toll

Access code: 2631 718 2962

THE SCOOP #2 – May 20th, 2022

Welcome to the second edition of The Scoop! Read more for our take on the latest market fluctuations, recent NFT drops and auction results, and upcoming Web3 industry events in NYC.

CRYPTO MARKET

Bitcoin to USD

Ethereum to USD

CRYPTO COMMENTARY

We have seen a large flight from risk over the past week with markets down across the board from US equities to crypto and NFTs. The rise in interest rates is one of the core causes, with the Federal Reserve walking a fine line between getting inflation under control and tipping the economy into a recession. Continued volatility can be expected as markets digest the changes in the economic landscape, and it may not snap back quickly.

For those that are new to the crypto markets, wild swings in value are par for the course. Investors in this market should get comfortable with this level of volatility. Case in point – Bitcoin:

Looking at the Bitcoin’s roller coaster ride since its inception, one can see the magnitude of the swings has only grown. While its performance exhibits some correlation to traditional financial markets, Bitcoin’s price is primarily linked to its mining algorithm and so called “halving events”. (A Bitcoin halving event occurs when the reward for mining bitcoins is cut in half. This reduces the amount of Bitcoin in circulation, leads to an increase in demand and thus higher pricing.) The halving in July 2016 has produced Bitcoin’s first notable spike which combined with increased awareness in the financial sector propelled Bitcoin from pre-halving price of $647 to just below $20,000 in less than 6 months. And while the pricing has gradually come down over the next year Bitcoin settled at over 5x the pre-halving pricing. We saw a similar pattern during the most recent halving in May 2020 when on the day of the halving Bitcoin closed 634% higher and reached $60,000 for the first time. The next halving is expected sometime in the early 2024. In the meantime, we will be watching how crypto prices evolve with major catalysts being crypto regulation in the US and the geopolitical uncertainty surrounding Ukraine.

_{Living Architecture: Casa Batlló by Refik Anadol}

WHAT’S THE BUZZ?

We’ve seen a lot of big drops pushing blockchains to their limits recently. High demand in a small amount of time often results in what is called a gas war, our buzz word for this issue.

GAS WAR

Every time you make a transaction on a blockchain network, there will be a network fee which is commonly referred to as ‘gas’.
Under normal circumstances gas fees can range from $10-$200 on the Ethereum network.
In instances of extreme demand where transaction speeds matter, fees can amount to thousands of dollars.
The gas war comes when many users increase their gas fee to pay for priority in the transactions queue and beat others to the sale.
Ultimately, those who do not increase their gas will end up paying a gas fee and while receiving the token they were attempting to purchase.
Planning purchases for when network activity is low can save a significant amount of money in fees.

_{Mother of Technology by collaboration between Madonna and Beeple}

UPCOMING EVENTS

The Fine Art Group will have team members head to New York city this June from the 20th to the 25th. They will be attending events NFT NYC, an annual industry event, and ETH NY, a hackathon featuring highly talented developers, and speaking to some of the best in the business. If you would like to connect, please reach out to our Digital Assets Specialist, Greg Adams.

NFT BLUE-CHIP COLLECTIONS

Top 5 Collectible Collections

Top 5 Photography Collections

NFT COMMENTARY

From a large sale at Christie’s to Madonna and Beeple’s collaboration, it has been an exciting couple weeks for digital assets. Refik Anadol’s Living Architecture: Casa Batlló sold for $1.38 million in Christie’s 21 Century Evening Sale. It was the only digital offering in the sale alongside pieces from Monet, Picasso, Warhol, and Basquiat. This hallmark sale among elite names brings this new medium further into the spotlight. However, demand was limited, and there had been hope for a larger sale price.

We are still absorbing the complex new work from Madonna and Beeple, Mother of Creation. Their launch on SuperRare was well received with all pieces receiving sizeable bids. Ever since Beeple changed the art world with his $69 million sale of Everydays: The First 5000 Days, collectors have been looking for his next big thing. With the proceeds going to charity, this certainly had a lot of eyes on it, even if it was somewhat uncomfortable to view.

With the recent broader market pullback there are two layers of movement: the underlying Ethereum is lower presently and on top of that we’re seeing a lull in floor prices across many PFP (profile pic) markets. What is interesting is we’re seeing some resilience and even upward movement in the Art Blocks Curated collection and photography space. Editions of 1/1 art is showing itself as possibly a resilient investment during downturns.

For example, in the Moonbirds NFT collection, the average price was down around 20% over the past two weeks with many transactions and volatility.

_{*Opensea.io; Vertical bars are volume}

In comparison we have Chromie Squiggles, a collection curated by Art Blocks. We saw an initial spike in transactions and value from those exiting riskier positions, but after that there was very little movement. Holders seemed unwilling to sell and ultimately were rewarded for their patience, with a 32% increase in average price.

FRESH & UPCOMING DROPS

While there isn’t much to note with many projects on hold, one that stands out: Following up on its successful Damien Hirst NFT projects, Heni are launching a new edition series by graffiti artist MadC entitled Color Rhythms. The series will feature 1,000 unique NFTs which were created by generative algorithm, but were hand selected by the artist. Another innovative element is the use of machine learning in naming of the individual NFTs – the name of each work is linked by AI to a movie character or another pop culture reference. Moreover, each image is stored on a decentralized storage system, IPFS. This project uses Palm blockchain instead of Ethereum, the main cause being less energy consumption. The application for the series closes on May 24 and each NFT is priced at $1,000.

NFT ARTIST SPOTLIGHT

Cath Simard

If you want adventure, look no further than Cath Simard. From Patagonia to Iceland, she has traveled the globe capturing enthralling landscapes. Simard made her biggest splash in September of 2021 with her #FreeHawaii photo project. She took a picture on the island of Oahu that went viral when she originally shared it online. While the recognition of her photography was valuable, the work also became the most stolen photograph she had ever taken. Instead of chasing down thieves for copyright infringement, Simaud chose to hold a unique and disruptive sale in the NFT space. She sold the photo as an edition of 1/1 NFT for around $300,000 and also notably released the rights to the image and a high-resolution file of it to the public, making it so anyone could use the photograph without paying a licensing fee.

Most recently, Simaud sold her piece Continuum through Sotheby’s in April 2022 for approximately $60,000. She continues her travels in Peru while creating new photographic works.

NFT & CRYPTO NEWS

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The Scoop #1 – May 4th, 2022

Disclaimer

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To celebrate our alliance with Schwartzman& and the opening of our new offices in New York City as well as a kick off of the Spring 2022 auction season, our Executive and Advisory Teams hosted a special cocktail evening.

NYC OFFICE

535 West 22nd Street
4th Floor
New York, NY 10011

STATE OF THE ART MARKET: INSIGHTS INTO THE SPRING 2022 AUCTION SEASON

Our Art Advisory Team gives an overview on the current state of the art market and comment on the Spring 2022 auctions.

State of the Art Market: Insights into the Spring 2022 Auction Season

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London

New York

Los Angeles

Philadelphia

Palm Beach

Brussels

Dubai

Hong Kong

THE SCOOP #4 – JUNE 21ST, 2022

CRYPTO MARKETS

CRYPTO COMMENTARY

WHAT’S THE BUZZ?

STAKING

NFT BLUE-CHIP COLLECTIONS

NFT COMMENTARY

NFT NYC

June 20th

June 21st

June 22nd

June 23rd

NFT ARTIST SPOTLIGHT

Takashi Murakami

NFT & CRYPTO NEWS

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Disclaimer

THE SCOOP #3 – JUNE 6TH, 2022

CRYPTO MARKETS

CRYPTO COMMENTARY

REGULATORY UPDATE

WHAT’S THE BUZZ?

SOUL BOUND TOKENS (SBTs)

NFT BLUE-CHIP COLLECTIONS

NFT COMMENTARY

Tax Talk

NFT ARTIST SPOTLIGHT

Chris Le

NFT & CRYPTO NEWS

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Disclaimer

DATE

FORMAT

LENGTH

SPEAKERS

OTHER WAYS TO JOIN

FURTHER READING

THE SCOOP #2 – May 20th, 2022

CRYPTO MARKET

CRYPTO COMMENTARY

WHAT’S THE BUZZ?

GAS WAR

UPCOMING EVENTS

NFT BLUE-CHIP COLLECTIONS

NFT COMMENTARY

FRESH & UPCOMING DROPS

NFT ARTIST SPOTLIGHT

Cath Simard

NFT & CRYPTO NEWS

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Disclaimer

NYC OFFICE

STATE OF THE ART MARKET: INSIGHTS INTO THE SPRING 2022 AUCTION SEASON

SPEAKERS

FURTHER READING

June 20^th

June 21^st

June 23^rd