The Scoop #11 – November 22nd, 2022

In this edition of The Scoop, we look at the FTX fallout, how other alternative assets are thriving, and feature a master of minimalism in our Artist Spotlight.

CRYPTO MARKET

Bitcoin to USD

Source: Google Finance

Ethereum to USD

Source: Google Finance

CRYPTO COMMENTARY

In a departure from the correlation we were mentioning in the last edition of The Scoop, the crypto market has taken a further step into crypto winter. Many thought the worst was over after Voyager, Celsius and 3AC collapsed, but it appears that they were just the prelude to something bigger. FTX, the second largest crypto marketplace, was using customer funds to take risky bets on the market, according to the Wall Street Journal. In a since deleted tweet, CEO of FTX Sam Bankman-Fried said “FTX is fine. Assets are fine.”   

Source: Twitter

There was an announcement from the CEO of Binance, Changpeng Zhao, saying that it had signed a letter of intent to acquire FTX after it performs due diligence on the company’s holdings. Shortly after that, Binance said it was walking away from the deal because the financial hole in FTX’s balance sheet is too large. Short of Sam Bankman-Fried pulling a rabbit out of the hat, FTX customers may be stuck holding the bag.   

The contagion isn’t over yet, with other platforms that had exposure to FTX experiencing liquidity issues. Gemini, one of the larger US exchanges, had to press pause on its Earn rewards program as it was unable to process withdrawals. In addition to other platforms one of the biggest losers is the Solana (SOL) token. Sam Bankman-Fried has been a large proponent for the network and without FTX’s investment in the token the value has dropped 40%. Solana offers faster transactions and lower gas fees than its larger competitor, Ethereum, but adoption was limited. Traders are trying to catch knives as the value keeps dropping, but what will be interesting is how the thriving NFT ecosystem on Solana reacts.   

Source: Coinbase

WHAT’S THE BUZZ

Blockchain networks will be utilized in many ways in the future, but they all rely on nodes to operate effectively.  

NODES

  • Nodes store and verify new blocks of data as transactions are executed on a blockchain.
  • Each node chooses to accept or reject the newest block based on the validity of its signatures and transactions.
  • If the block is accepted, then it continues to be shared with other nodes until a consensus is reached.
  • Having multiple nodes continuously syncing with one another maintains the integrity of the network.
  • Since nodes are distributed in a decentralized manner, there is no single owner of the data.

NFT BLUE-CHIP COLLECTIONS

Top 5 NFT Collectibles Collections

Source: OpenSea

Top 5 NFT Photography Collections

Source: OpenSea

NFT COMMENTARY

The reliance of NFTs on blockchains is something so many people have glazed over. From valuation dependency to functional capability there would be no NFTs without their crypto foundations. With the shakeup at FTX and the ripple going through the crypto markets, Solana has become a victim of questionable financial decisions. In September, Solana NFT sales rose by 77% compared to August, but now they’ve had 40% of their value sapped in a day. This volatility is unprecedented and shows the risk this market presents. What if the same happened to Ethereum?  

Source: CryptoSlam Solana NFT daily sales peaked on Sept. 6 at $10.6 million.

The rapid fluctuation in value is what has thus far kept NFTs from being more mainstream. The Fine Art Group recently attended the Appraiser Association of America’s Of Value: 2022 National Conference and there were many interesting takeaways on the NFT market. A panel of specialists in the insurance, art and auction businesses gathered to discuss how their industries were approaching the new technology. Each are embracing it and building as they go. The insurance industry has been slow to insure these intangible items since valuation models are still being built. Ultimately, stability (and regulation) would make these tasks much more palatable. Sotheby’s is looking at it as an opportunity to grow; 78% of clients bidding on NFTs were new to Sotheby’s and the majority are under 40. With this fresh crowd, the art industry is starting to embrace the new medium.  

Source: y00ts collection on Solana, a driver of the September sales spike on Solana.

ART AS AN ALTERNATIVE ASSET

Those looking for alternative assets that aren’t so tied to crypto valuation and macro-economic factors are looking elsewhere. We’re seeing NFT collectors starting to branch out by adding physical items to their galleries. These next generation collectors are buying everything from contemporary art to high end sneakers and trading cards. NFTs have been the perfect gateway to the art world for many newly affluent collectors.     

Special Edition Louis Vuitton and Nike Air Force #1, sneaker collection sells for record breaking $25m. Image courtesy of Sotheby’s

The Fine Art Group experts are thought leaders in the area of art and investment. With multiple art funds under their belts and with the appraisal division being one of the largest globally, we thought it might be useful to get a bit of insight into the art market today. Both Roxanne Cohen and Elena Ratcheva, Directors in our Art Advisory division, were bidding in the evening sale for Paul Allen at Christie’s so it might be useful to hear their thoughts.  

With over 1.5 billion dollars trading in two days, is the art market oblivious to the inflationary economy? Roxanne noted that prices for pieces in the $2 to $8 million range were in many cases double expectations. The price range is very much the sweet spot for investment, and it was clear that wealthy individuals understand this to be the case. There is no doubt that we were seeing investment in this range of value as a “safe” place for them to park their cash.  A+ examples of paintings selling in the art market are also achieving above estimate.

The key takeaways from our specialist Elena Ratcheva are:

  • “Always collect the very best example you can afford; it should pay dividends in the future.”
  • “The very top end of the market is completely separate from the rest: blue-chip, high-quality works are seen as a clear hedge against inflation.”

The Fine Art Group Art Investment Advisors are available to speak in more detail. Their contact info is below.

Elena Ratcheva
Director, Art Advisory

Roxanne Cohen
Director, Art Advisory

NFT ARTIST SPOTLIGHT

GRANT RIVEN YUN

Growing up, he always told his father he wanted to be a photographer and spent his childhood drawing as much as he could. During his freshman year in college, he started using PowerPoint to create images using layers and gradients before transitioning to Adobe Illustrator sometime later, admitting “I felt completely lost when I first came to the digital side.” His artistic influences came from such unique places like Standard Station by Ed Ruscha and The Midnight Ride of Paul Revere by Grant Wood. Another interesting space in which he found inspiration was the early 90s video games. He attributes his clean lines and basic compositions to the combination of all the art that drew him in.  

Grant Riven Yun, Special Delivery, NFT 1 of 1. Image courtesy of Sotheby’s.

One thing he told himself before even entering Web3 was that he would be featured by an auction house. His success in the NFT space landed him a spot in the Sotheby’s Hong Kong Digital Art Fair with his piece Special Delivery selling for HK $693,000. He has worked across several platforms, with his Nifty Gateway Life in Japan editions on OpenSea being the lowest cost entry point to collect his work.   

Source: OpenSea

NFT & CRYPTO NEWS

GREG ADAMS

DIGITAL ASSET SPECIALIST & ADVISOR

Phone: +1 (610) 908 2740
Email: gregadams@fineartgroup.com

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.

The Scoop #10 – November 2nd, 2022

In the 10th edition of The Scoop, we cover the rise in the correlation between crypto and equities and fractionalization. We also examine the royalty debate in the NFT space and spotlight Yuga Labs.

CRYPTO MARKETS

Bitcoin

Ethereum

CRYPTO COMMENTARY

Bitcoin, the bellwether for crypto, has been rangebound – confined to upper and lower limits – since July. We’ve seen the same pattern in the stock market. Correlation between the traditional equity markets and crypto prices has grown stronger over time, with both responding similarly to events like the Fed announcements.

Source: Trading View, Dow Jones Industrial – Blue, S&P 500 – Orange, Bitcoin – Green

Instead of being an alternative to traditional markets, crypto has succumbed to the same economic pressures. It appears retail investors are staying on the sidelines, wary of further declines and future uncertainty while institutional trading has dominated the market. Less trading has produced less movement. With another interest rate hike in the works and a strengthening dollar, we can expect there to be continued downward pressure on cryptocurrencies. However, there have been rumors of the Fed easing its hikes as early as next year, but it will rely upon positive movement in the inflation measures.

In other news, the SEC continues its dive into the crypto markets with investigations into former crypto lenders Celsius and Voyager, along with the bankrupt Three Arrows Capital hedge fund. They are also probing Yuga Labs, creator of the Bored Apes collection, to better understand the dynamics of their NFT business. For many investors, the SEC looking into these issues is a positive development, citing more comfort in transacting when there are rules and regulations in place to serve as guard rails for this growing market. The headlines may not be great, but progress is being made for the better.

WHAT’S THE BUZZ

We’ve heard of other collectibles having shared ownership, but the digital nature of NFTs has made fractionalization even simpler.

FRACTIONALIZATION

  • Fractionalization is when one NFT is split into smaller pieces to allow for more than one owner.
  • Tokens for ownership are created and sold on the secondary market.
  • This increases liquidity for the owner while creating an opportunity for those with fewer resources to own a piece of the NFT.
  • This process does have down sides including IP rights concerns, contract security and cost.
  • As part of a wider probe, the SEC is looking to determine if fractionalized NFTs should be treated as securities.
  • Fractional.art (which is becoming Tessera) is currently the main platform to offer fractionalization, with several smaller marketplaces in competition.

NFT BLUE-CHIP COLLECTIONS

Top 5 NFT Collectible Collections

Source: OpenSea

Top 5 NFT Photography Collections

Source: OpenSea

NFT COMMENTARY

The top of the charts is business as usual with the big names still seeing the most volume; however, overall volumes are hovering around $10+ million a day. It’s important to mention that we can’t just look at OpenSea anymore. The rise of X2Y2 has been a long time coming and they are now in competition with OpenSea for being the largest marketplace.

Source: Dune

One reason for X2Y2’s rise is that it doesn’t enforce creator royalties. The biggest debate in the NFT space right now is how royalties should be handled: Artists and creators argue they should be enforced while investors and traders are focusing primarily on their own margins. Since the royalties can’t always be enforced “on chain” but only in marketplaces, some artists have gone as far as blocking their work from being listed on the platform. In an already competitive market, this will change the dynamic for where creators sell their work and buyers purchase their NFTs.

Christie’s 3.0 had a successful debut with a 100% sell-through rate on its nine Diana Sinclair pieces. Prices ranged from about $5,000 to $10,000 with a premium piece selling for over $25,000. This was a very strong showing in an otherwise gloomy market. On the other hand, Sotheby’s Amazonia blind mint featuring Sebastião Salgado’s work didn’t get such a warm welcome. With a price point of $250 and 5,000 pieces available, only 2,280 were minted in the open mint window. It seems as though many collectors were hesitant to purchase a piece when they didn’t know what they were getting. While the same drop mechanics have worked in other instances in the NFT market, it appears we may need some re-tooling for the fine art crowd.

Diana Sinclair, Still from I Want to Nurture the Earth. Image courtesy of Christie’s.

NFT ARTIST SPOTLIGHT

YUGA LABS

In departure from our usual practice, in this issue we’ll highlight a creator group as opposed to a single artist. Yuga Labs has so far outperformed the rest of the NFT space by quite a wide margin with its Bored Ape Yacht Club collection. Through a keen mix of technology, art and marketing, it developed a cult following in the NFT space. One of the first projects of its kind, it’s one of the few creators to successfully deliver on its plans. It incorporated in the state of Delaware in February 2021. The Bored Ape collection was launched on May 1, 2021, with a floor price of .08 ETH, around $240 at the time. By August, the floor price was over 44 ETH, $135,000 at the time marking one of the biggest jumps in the space.

Yuga Labs, Bored Ape Kennel Club #3970

Following that success, Yuga Labs launched Bored Ape Kennel Club and Mutant Ape Yacht Club to tie in with Bored Apes. All have proved a success so far, including the most recent sale of Otherside deeds which represent land in the metaverse it’s building. Since then, it’s also purchased the rights to Cryptopunks and Meebits, two separate but high performing collections that are now part of its ecosystem.

Yuga Labs, Bored Ape Mutant Club #16938

The collection was created in anonymity, and the creators were only recently revealed (or doxxed) by Buzzfeed as Greg Solano and Wylie Aronow, who are otherwise relatively unknown. In late March, Yuga announced a $450 million funding round with Andreesen Horowitz (A16Z) valuing the company at $4 billion. With the sway it holds in the NFT market right now, many are looking at it as a primary example of a successful NFT business.

NFT & CRYPTO NEWS

GREG ADAMS

DIGITAL ASSET SPECIALIST & ADVISOR

Phone: +1 (610) 908 2740
Email: gregadams@fineartgroup.com

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.

The Scoop #9 – October 15th, 2022

In our 9th edition of The Scoop, we discuss crypto’s response to global inflation, the Ethereum merge, and spotlight the NFT artist XCOPY.

CRYPTO MARKETS

Bitcoin

Ethereum

CRYPTO COMMENTARY

Crypto is at a very unique point in its history. Bitcoin and Ethereum have developed their own trading cycles throughout the years, but only in a stable macroeconomic environment. The last global recession was from 2007-2009, before Bitcoin was invented, so this is the first time anyone is seeing this new financial ecosystem under external duress. Rising interest rates and high inflation have put the squeeze on markets around the globe. Some are fleeing Bitcoin to get away from risk, but there are others investing in Bitcoin as an inflation hedge. With the U.N. calling for the Fed to halt its rate increases for fear of tipping less developed countries over the edge, there is no track record for how cryptocurrencies will react to the scenario that is currently playing out.

Global Inflation Rates – Source: Trading Economics

Despite the unique circumstances facing the crypto markets, we are still seeing major brands enter the space. NASDAQ, the second largest stock exchange in the world, is launching a digital assets business aimed at institutional investors. The business unit is going head to head against Coinbase, Blackrock, Fidelity and Gemini by offering crypto custody services. As more companies begin to offer this service this will ultimately support wider adoption of these assets and increase the competition in this space.  

Voyager, the insolvent crypto lender, placed its assets up for auction after declaring bankruptcy, and the winning bidder was rival platform FTX. An agreement for $1.4 billion was reached in bankruptcy court for the fair market price of Voyager’s crypto assets with only $51 million attributed to paying for the platform’s business and user base. FTX has been quick to snap up distressed assets in the crypto world after pulling in over $1 billion in revenue last year. 

The SEC made its thoughts known on those promoting crypto currencies with its ruling on Kim Kardashian, which found that Kardashian violated the anti-touting provision of federal securities laws. Without admitting or denying the SEC’s findings, Kardashian agreed to settle for $1.26 million, including approximately $260,000 in disgorgement, which represents her promotional payment, plus a $1 million penalty. Kardashian also agreed to not promote any crypto asset securities for three years. With a strong precedent like this, we believe there will be more of these cases in the future.

WHAT’S THE BUZZ?

With the highly anticipated Merge on Ethereum successfully completed, what are the outcomes? 

OUTCOMES

  • “The Merge” refers to the original Ethereum Mainnet merging with a separate blockchain called the Beacon Chain.
  • Ethereum transitioned from “proof of work” to “proof of stake.”
  • This change reduced energy consumption by 99%.
  • The number of Ethereum tokens being created moving forward also went down 90%.
  • Those with large Eth holdings can now stake their balances to earn monetary rewards for confirming transactions on the network.

NFT BLUE-CHIP COLLECTIONS

Top 5 NFT Collectible Collections

Source: OpenSea

Top 5 NFT Photography Collections

Source: OpenSea

NFT COMMENTARY

The ongoing bear market continues as volumes are still muted. There is little sign of a break in sight with other macroeconomic issues playing out. The last data point from the Sotheby’s Max Stealth collection auction indicated that even the high-end market has been impacted.  

However, it seems that the bear market is the best time to build. After Christie’s Ventures was announced in June, and we are starting to see the first outcomes for the new business with Christie’s launching Christie’s 3.0, its Web3 platform that will service all of its NFT needs. After The Merge, they chose Ethereum to build on. Going forward all Christie’s 3.0 NFT auctions will take place on the Ethereum blockchain network from start to finish. All transactions, including those after the sale, will be automatically recorded on the blockchain. A true differentiator, Christie’s 3.0 addresses the fundamental needs of the market by including compliance and tax tools, making it the first of its kind. Christie’s 3.0 is the result of a collaboration with three leading companies in the Web3 community – Manifold, Chainalysis and Spatial. 

Source: Virtual Gallery, Christie’s 3.0

Sotheby’s next major event will be a NFT mint, with 5,000 pieces from Sebastião Salgado in a collection called Amazonia. This is the first time Sotheby’s is hosting the creation process for NFTs on its platform. For $250 buyers can mint a unique 1/1 from the collection; however, they will be randomly assigned and revealed three days after the mint closes. This is following the playbook of many other NFT collections where collectors feel the rush of not knowing what NFT they will ultimately end up with. How this is received from a fine art perspective is something we will be watching closely.

NFT ARTIST SPOTLIGHT

XCOPY

After a piece did well in the Sotheby’s Max Stealth auction, we want to look at a true unknown in the space – XCOPY. One of the first digital artists to start using NFT technology in 2018, we still don’t know the identity of XCOPY. The work this creator has been putting out looking at death, dystopia, and apathy has sold for incredible sums throughout the NFT bull run with A Coin for the Ferryman selling for over $6 million on SuperRare. With just short of 10,000 pieces created, many with epilepsy warnings, the work has proliferated throughout the art world and XCOPY has developed a cult following. While we don’t know what drives the creation of these pieces, and we may never know, this has quickly become a name to know in the NFT world. The Max Pain editions have seen a recent uptick in sales after the auction, as seen below. Vertical bars are volume.  

NFT & CRYPTO NEWS

GREG ADAMS

DIGITAL ASSET SPECIALIST & ADVISOR

Phone: +1 (610) 908 2740
Email: gregadams@fineartgroup.com

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.

The Scoop #8 – September 20th, 2022

In our 8th edition of The Scoop, we discuss inflation’s impact on the crypto markets, NFT sales volumes, and spotlight the founder of Art Blocks.

CRYPTO MARKETS

Bitcoin

Ethereum

CRYPTO COMMENTARY

The bumpy road continues for markets across the board as the Fed has indicated that interest rates will remain elevated for the foreseeable future. Markets reacted negatively to Jerome Powell’s comments that the Fed would continue to raise rates as high as needed and keep them there “for some time” to tame inflation, which is running much higher than its 2% target. Traditional equities and cryptocurrencies alike saw increased volatility after the remarks, and more is expected as Fed President John Williams pushed back on the idea that there would be a rate cut next year.   

Source: FRED

Looking at the Fed funds rate level over the last 10 years shows the healthy and natural rate hike cycle begun in 2016 to keep the right balance between growth and potential inflation. As COVID, a black swan event, hit the global economies in an unprecedented way in early 2020, the Fed slashed the interest rates back to near zero (shaded area on the graph). While the short term pain from the pandemic was blunted, this allowed for inflation to grow very quickly unchecked as the economy reopened. It’s worth noting that despite the spate of recent hikes, the Fed funds rate is now at the levels we saw just before the pandemic. Although inflation slowed down a bit in July to an 8.5% increase year-over-year in CPI, we are still at levels not seen in the last four decades. 

The reactions of the market aren’t a surprise, and since many investors are still fleeing risk, the major indexes and tokens could continue their descent. We are still teetering on the edge of a recession, with the next six months being crucial for a “soft” landing.  

WHAT’S THE BUZZ?

In the world of NFTs, what is the single most important piece of security? A seed phrase.  

A SEED PHRASE

  • Every seed phrase consists of 12-24 random words pulled from a list of 2,048. 
  • If access is lost to your wallet or it is deleted, you must have the seed phrase to restore your access. 
  • There is no one to call for help if a seed phrase is misplaced; all of the contents in the wallet are lost.
  • The seed phrase must be kept secure at all costs! 
  • One of the largest phishing scams seen in this space is malicious actors pretending to be from Metamask or Coinbase and asking people to verify their seed phrase. Nobody from any of those companies will ever ask for it.  

NFT BLUE-CHIP COLLECTIONS

Top 5 NFT Collectible Collections

Source: Opensea.io

Top 5 NFT Photography Collections

Source: Opensea.io

NFT COMMENTARY

While the usual suspects are in the top NFT charts, there is nothing usual about the trends that we’ve been seeing in the NFT markets. We’re still seeing the consolidation behind Bored Apes, Cryptopunks, and the Art Blocks collections, which is expected for the blue chips. But the real story is in the number of NFTs being sold and overall cash volumes.  

Source: Dune

Looking at total number of NFTs sold, summer was business as usual. The count of NFTs being sold looks healthy and doesn’t hint at a market downturn. The data points to the number of sales being in its expected range.  

Source: Dune

When we look at the overall monthly volume on the Ethereum network (measured in USD) we’re seeing a summer slowdown with considerably less currency changing hands. We understand it’s a bear market for crypto and that’s a factor, but this leads us to believe it really is a bear market for NFTs as well. People are still buying NFTs but aren’t paying as much. The average price per NFT has dropped considerably. 

The most recent test for the secondary NFT market came from the Sotheby’s MaxStealth Collection sale on Sept. 14. It was the first NFT single-owner live auction, and it opened the door for this concept moving forward. Pieces from XCOPY, Pak and Beeple were included in the 26-lot offering. The timing of the auction was a bit puzzling. With the unease in the global economy and crypto space, it seems that Sotheby’s bet the quality of NFTs on offer would offset the pressure from the larger macro-economic picture. We were able to derive a lot about the health of the high-end NFT market from this sale, especially how valuations are tracking in a bear market. With several pieces withdrawn or unsold it seemed that demand did not meet the Sotheby’s sales expectations – the sale achieved an aggregate sale price of $1.7m against a total pre-sale low auction estimate of $2.9 million. ​Lots above the $100,000 mark seemed to struggle with the exception of the XCOPY piece, while mid-value lots from Beeple, Hackatao/Coldie, and Alessio De Vecchi sold above their respective high estimates.

Departed by XCOPY

NFT ARTIST SPOTLIGHT

Erick “Snowfro” Calderon 

The man, the myth, the legend behind Art Blocks has been a force in the NFT space since he sold his Cryptopunks to fund his new project. Since its inception, Art Blocks has become the epicenter of generative art in the NFT space. From Fidenzas to Ringers, some of the most pivotal collections have found a home under the Art Blocks umbrella. 

Ringers #661 by Dmitri Cherniack

Before Art Blocks, Erick dabbled in painting and other forms of colorful art yet never sought out gallery representation. However, when it comes to generative art, his Chromie Squiggles have become one of the grails in the NFT space since their launch. Working in 3D rendering software called Three.js, Erick adapted one of the sample scripts – a rigid squiggly line consisting of squares – and smoothed the lines out and added movement, rainbows and translucency. Most recently, the Chromie Squiggles popped up on tickets for VeeCon, a conference hosted by Gary Vaynerchuk who is also a Web3 entrepreneur. Rumor has it they’ll soon be on a football jersey somewhere in the EU, bringing further exposure to this new breed of art.   

Chromie Squiggle #4008 by Snowfo

After making a splash in 2021, Art Blocks announced a partnership with Pace Verso in June 2022 bringing two of the most prominent players in Web3 and contemporary art together. This venture will open the doors to new exhibitions and collaborations between the traditional art world and the NFT space. Each has a lot to bring to the table, so we’re looking forward to seeing where this goes.   

NFT & CRYPTO NEWS

GREG ADAMS

DIGITAL ASSET SPECIALIST & ADVISOR

Phone: +1 (610) 908 2740
Email: gregadams@fineartgroup.com

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.

THE SCOOP #7 – August 15th, 2022

In our 7th edition of The Scoop, we cover the stabilizing markets, Blackrock partnering with Coinbase, airdrops, and the conclusion to Damien Hirst’s The Currency experiment.

CRYPTO MARKETS

Bitcoin

Source: Google Finance

Ethereum

Source: Google Finance

CRYPTO COMMENTARY

With the bounceback in traditional equity markets over the last couple of weeks, Bitcoin and the broader crypto markets have seen some stability while the crowd seems split as to whether the worst is behind us. The flow of bad news and lender defaults has slowed to a trickle, but many seem to have a bad taste in their mouth from the recent market washout.  

There is some good news though, as Blackrock and Coinbase have agreed to a partnership that would allow crossover for Blackrock clients to trade and manage crypto in-house. The agreement combines Blackrock’s Aladdin service with Coinbase Prime so institutions will have full control of their holdings in one place. The scale that Blackrock brings to this partnership sent Coinbase shares up 44% intraday but closing the day only 10% up.  

Amid rising interest rates, geopolitical tension, recession fears and a broader market selloff, this news is a breath of fresh air for a market that was slipping underwater. What this does on a larger scale is show that Wall Street’s appetite for crypto adoption is growing. More institutional adoption may be just what crypto needs to grow in price, maturity, and stability. Now that the biggest fund manager in the world is on board, who will be next? 

WHAT’S THE BUZZ?

Imagine looking in your wallet one day and finding a new piece of art from one of your favorite creators. How did it get there? An airdrop.  

AIRDROP

  • Airdrops are distributions of NFTs, tokens or cryptocurrency to a Web3 wallet address 
  • Use cases include marketing, additional perks for collectors, or showing proof of attendance 
  • They are often viewed as “dividends” for owning certain NFTs 
  • In many scenarios, creators use this tool to connect with their collectors. For example, devoted collectors of Daniel Arsham’s Eroding and Reforming collection on Nifty Gateway will be airdropped an exclusive 11th NFT if they collect all 10 that were released 

NFT BLUE-CHIP COLLECTIONS

Top 5 Collectible Collections 

Top 5 Photography Collections

NFT COMMENTARY

The recent rise in the value of Ethereum has led to a stabilization in floor prices, but we’re still seeing slower volume on OpenSea and other major marketplaces. In the next month or so we’ll be able to see if this was just everyone on summer break or if this is the new normal. 

Source: Tokenterminal 

While volumes and values have been treading water not all the metrics have done the same and we are still seeing growth in adoption. The total number of active users was up 2.2% over the last 90 days in a promising sign that this platform is still onboarding new collectors.  

In the bigger picture, there have been some conspicuous entries to the NFT market. In the social media world, Meta is working its way towards integrating NFTs into its popular Instagram platform so collectors can show off their pieces and creators can market their work. Major League Baseball is now giving away digital collectibles at their games; ticketholders can claim their NFTs with creative group Candy, introducing a vast audience to Web3. And last but not least, high fashion has jumped into NFT trends with Tiffany’s releasing NFTiffs, which are NFTs valued at $50,000 but paired with custom CryptoPunk avatar pendants. There are some differing opinions which Tiffany’s will have to contend with, but it doesn’t seem like they’re planning on backpedaling. Brands will have to watch how they manage their image in a whole new way moving forward.  

Alexandre Arnault tweeted his Tiffany & Co. CryptoPunks pendant in April 2022. Image: Courtesy of Vogue.sg and Tiffany & Co.

NFT ARTIST SPOTLIGHT

Damien Hirst

I was born into the curse by Damien Hirst

He is no stranger to the art world, but he was an early adopter in the NFT world. Damien’s experiment has literally caught fire. About a year ago when he released his collection, The Currency, he gave collectors an ultimatum about how they would ultimately get to keep their art. Each NFT was matched to a physical piece and at the end of the first year they had to decide which they would keep: the physical piece or the NFT. The one not chosen would be burned.  

Image is of a twitter tweet by contemporary artist Damian Hirst, describing the results of his recent art release The Currency, which gave buyers the choice between an NFT or physical art piece. The tweet describes that more buyers chose physical pieces than digital, but by a slim margin.
Source: Twitter 

It was not a surprise to the art world that the physical pieces were preferred, but what did raise an eyebrow was how slim the margin was. It wasn’t as lopsided as many expected — 51% chose the physical pieces and 49% picked the NFTs. Perhaps the most difficult decision was for the artist himself. He had to make a choice on his 1,000 pieces and opted for the NFTs on all of them. He churned on the decision for quite some time but laid it all out in a Twitter thread on how keeping them as NFTs would be the next logical step, saying he has “no idea what the future holds, whether the NFTs or physicals are going to be more valuable or less. But that is art! the fun, part of the journey and maybe the point of the whole project. Even after one year, I feel the journey is just beginning.” We’re with you Damien.

Source: OpenSea

NFT & CRYPTO NEWS

GREG ADAMS

DIGITAL ASSET SPECIALIST & ADVISOR

Phone: +1 (610) 908 2740
Email: gregadams@fineartgroup.com

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.

THE SCOOP #6 – July 27th, 2022

In this edition of The Scoop, we cover the latest 3AC default news, consolidation in the NFT market, and dive into DAOs.

CRYPTO MARKETS

Bitcoin

Source: Google Finance

Ethereum

Source: Google Finance

CRYPTO COMMENTARY

After bank earnings have been reported there is a cautious sense of optimism in the markets with some green in the charts for a change. Many investors are waiting for the next CPI (consumer price index) numbers to come out before making any moves. The restless indecision has created some expected choppiness while JP Morgan warns we may not have seen the bottom yet. The cost to mine a single Bitcoin has dropped dramatically from $24,000 to $13,000 and it could lead to a further decline in the crypto’s value. The price to mine Bitcoin has fluctuated over time since it is so energy-dependent. At the peak in February 2022 it cost $33,500 to mine a single Bitcoin while the cost is now $18,900, a 43% decrease.

Source: MacroMicro

The drama continued in the lending space as bankruptcy filings for 3AC, the crypto hedge fund, revealed that the founders made a down payment on a yacht while ignoring their debts. They owe $3.5 billion to insolvent crypto lenders like Celsius and Voyager. The courts fear that 3ACs assets already may have been liquidated and transferred out of the fund with founders Su Zhu and Kyle Davies off the grid and not responsive.    

Many believe this event will lead to more cautious investors, slower adoption and more stringent rules from the government. The coming regulation could create more accountability for the malicious actors and build protections for retail investors similar to the traditional securities markets. It feels like we’re moving away from decentralization and more Wall Street, which is a bit of a paradox since that’s what crypto was built to avoid, the traditional banking system.

Incomplete Control #84 by Tyler Hobbs

WHAT’S THE BUZZ?

With so many new communities popping up in Web3, we’re seeing a new form of management in those communities in the form of DAOs. It’s like a corporate structure for decentralized entities.   

DAO

  • DAO stands for Decentralized Autonomous Organization.  
  • It is a structure where token holders take part in the decision making and management of the group.
  • With no central authority, the power is distributed across the token holders who cast votes on initiatives proposed by the community.  
  • Many organizations place their votes on blockchain where the results can be publicly viewed  
  • Security is crucial for DAOs as any exploit could drain them of their holdings, the most notable being The DAO Hack of 2016 resulting in a $50 million loss.
  • A great application of this concept is LinksDAO, a group of golf enthusiasts who are building a community around the game with the goal of owning a golf course. Their token release will be helping fund the purchase and members will be voting on where the course will be along with other initiatives to grow their footprint.

NFT BLUE-CHIP COLLECTIONS

Top 5 Collectible Collections 

Source: OpenSea

Top 5 Photography Collections

Source: OpenSea

NFT COMMENTARY

With green in the crypto markets comes an uptick in the NFT markets. The speed of the consolidation into blue chip projects has increased with Bored ApesCryptoPunks, and Art Blocks increasing in both value and volume. Many other projects have been stuck in neutral, with either modest gains or slight declines despite a lift in the cryptocurrency value.  

The recent dip has given everyone a renewed perspective on what value is. Some projects didn’t survive, and maybe that’s a good thing. Collectors are getting pickier with NFTs they’re putting money into, and the two biggest drivers are history and utility. If a project doesn’t have any cultural significance or doesn’t grant access to any meaningful perks, collectors are passing on it.    

In a meeting recently, we were asked what we thought about the recent market pullback. We think it was bound to happen after an explosive first year and necessary to bring sky-rocketing expectations back to earth. The amount of building in this space by both artists and other industries is increasing during this market lull, and the technology cannot be ignored at this point. Christie’s has launched a new enterprise named Christie’s Ventures to engage with early-stage companies in Web3.0 innovation, art-related financial products, and solutions and technologies that enable seamless consumption of art. This is a positive sign and possibly an indicator of more players entering the space.

NFT ARTIST SPOTLIGHT

Tyler Hobbs

The Austin, Texas-based artist behind the iconic Art Blocks Fidenza collection has had creating in his blood from a very young age. He took up painting when he was little with inspiration from Van Gogh and other landscape artists he had seen with the goal of becoming an artist. For pragmatic reasons, Hobbs was persuaded by his dad to study computer programming and got a programming job in his 20s while still creating on the side.

One day he had an idea: “What if I wrote a program that created a painting?” Hobbs went to work on combining his two passions and developed algorithms that would do just that. Tyler was sharing his work on social media and eventually he was getting messages on Twitter about NFTs. The rest is history. 

Source: OpenSea

The above chart shows all the volume (vertical bars) this collection has seen in July with the price (blue line) gradually going up. They have seen a recent resurgence in secondary sales as the rest of the Art Blocks collection continues to grow. Fidenzas have become a grail item for many in the collecting space with only 999 of them in existence. Many have placed historical value in this collection since it was one of the first formal Art Blocks releases. 

Fidenza #799 by Tyler Hobbs

NFT & CRYPTO NEWS

GREG ADAMS

Digital Asset Specialist & Advisor

Phone: +1 (610) 908 2740
Email: gregadams@fineartgroup.com

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.

THE SCOOP #5 – JULY 8, 2022

CRYPTO MARKETS

Bitcoin

Ethereum

CRYPTO COMMENTARY

After the recent drop across the broader markets, we have seen the most significant cryptocurrencies level out, with Bitcoin still hanging around its $20,000 support line. The buy-and-sell pressure is in equilibrium, and it appears the market is waiting for a new catalyst before making any moves. What is interesting is looking at miner outflows; a sudden spike in sales from Bitcoin miners to exchanges and OTC markets indicates that miners are bearish. In the last four months, we saw value fall shortly after each time we saw a spike in sales volume. With two recent spikes this month, many technical onlookers are waiting for another drop.

Source: Cryptoquant

The fallout from the Terra Luna implosion is still lingering. It has been three weeks since Celsius halted withdrawals on its platform, and investors are still stuck. It was in acquisition talks with FTX; however, FTX passed on the deal due to a “$2 billion hole” in the Celsius balance sheet. Celsius has managed to repay some of its debts, while others are still outstanding. More recently, a sign that the contagion may still be spreading, another crypto lender, Vauld, announced it had also halted withdrawals. Rival Nexo had approached Vauld about a possible acquisition, but nothing has materialized yet.

While this isn’t as big as the Terra Luna hole, many insiders expect there to be ripples from this event. Last Friday, crypto hedge fund 3AC (Three Arrows Capital) formally filed for bankruptcy in New York after being forced to liquidate by a court in the British Virgin Islands. By filing for Chapter 15, they can shield their assets from repossession in the U.S.

The Biden administration is working on a stablecoin regulatory package that could be law as soon as Q4. Stablecoins (USDC, Terra) are coins pegged to currencies like the US dollar. The US regulatory package will define how the burgeoning $70 billion markets will operate and how they will be used. In the EU, regulators are looking to make reserves mandatory for these stablecoins, similar to the banking system. The pressure is on regulators to create guardrails for this new industry after the Terra Luna bust harmed many.

WHAT’S THE BUZZ?

Say you love an artist, and you’re not picky. You just want a piece from their newest drop. How much is it going to cost?

FLOOR PRICE

  • The Floor Price is the cost of the lowest-priced piece you can purchase in any given collection.
  • In PFP projects, the floor usually consists of NFTs with shared traits. NFTs with rare characteristics fetch a higher price.
  • For utility collections, where the tokens are generally identical, there are usually more pieces at the same price point, creating a “thick floor.”
  • Opportunities arise when high-volume collections have a “thin floor”, meaning there are few pieces at the bottom with a swift rise in price once the lowest have been purchased.

NFT BLUE-CHIP COLLECTIONS

Top 5 Collectible Collections 

Top 5 Photography Collections

NFT COMMENTARY

Source: Dappradar

The NFT market has been moving sideways for the most part to match the lull in crypto markets. The volume and the overall number of transactions have fallen since NFT NYC. Prices haven’t dipped further, but with such light trading the values don’t have as much support as they usually do. It’s like everyone went to the conference and followed it up with summer vacation, which very well could be the case.

While we aren’t in a crypto winter (yet), it could be said that many in the NFT space are frozen. Similar to the crypto markets, it feels like NFT holders and creators are in a holding pattern. Sometimes no action is the best, but we are still seeing consolidation from riskier projects to safer bets. It also underscores a more significant shift in strategy. Yes, flips are still possible, but they are more dangerous and scarce. People are starting to research before investing in projects because there isn’t as much easy money floating around, and everyone has been ‘rugged’ at least once by this point. The collector space is getting smarter and piling into either historically significant collections like CryptoPunks or seeking utility with VeeFriends or LinksDAO. Art and community still sell projects, but this could be the beginning of a long-term trend where collectors expect more from their NFTs than just .jpegs. 

NFT NYC

With 15,000 registered attendees, this year’s conference was the largest yet. Even in a bear market, there was a quiet optimism throughout the week, with many in the space saying it was the perfect time to build. Around 1,500 speakers from the fashion, art, sports, and finance worlds were eager to share their insights. There was something to learn from everyone. The event planners blended these topics efficiently, making jumping from one speaker to another easy. The conference went off without a hitch, other than mile-long registration lines, but the most exciting get-togethers were happening after hours. 

In the PFP world, several large exclusive parties with DoodlesAzuki, and Nifty Portal offered IRL (In Real Life) experiences to their NFT holders. Fewocious offered a paint party for his followers that did not disappoint, but the headliner outside the conference was ApeFest. Several nights at Pier 17 ended with rappers Eminem and Snoop Dogg introducing a new song incorporating their Bored Ape avatars. Yuga Labs (creators of BAYC) showed again that they are cultivating the best community with premier experiences in the PFP spectrum. 

The Azuki Collection by TeamAzuki

There were plenty of galleries to cruise through showcasing fine art. Comp Stomp Studios, led by a group of photographers, set up shop to provide a relaxed gallery experience for the photography community. SuperRare had its pop-up gallery up and running with some of its platform’s best work on display. Time magazine and its Time Pieces NFT collection took over a movie theatre and showcased both creators and their art through interactive artist panels and big-screen showings of curated works. It was the most creative event of the week. Christie’s hosted a reception for its Cartography of the Mind charitable collection benefiting MAPS. It was one of the first high-profile philanthropic auctions with several pieces far outperforming expectations, mixed in with underperformers.

What was clear is that presentation is everything for NFTs. The more innovative, the better. Time Pieces set a new precedent we believe will be duplicated by others. Christie’s put its professional touch on NFTs with its signature clean and contemporary gallery feel. Pace Verso took it a step further and kept its showing to a smaller area in its gallery, giving Jeff Koons’ moon NFT project plenty of room in a high-end display. When Refik Anadol made his big-ticket Casa Batlló sale, the exhibit for that was a master class for the rest. Details like the Anadol piece reacting to where a viewer was standing made a difference. In contrast, many of the pop-up galleries felt rushed; the art was displayed but it seemed the details could have been executed with more care.

Moon Phases by Jeff Koons with Pace Verso

NFT ARTIST SPOTLIGHT

Chris Hytha

Hailing from Philadelphia and the Drexel School of Architecture, Chris Hytha has evolved over his career, experimenting with surreal concepts through Photoshop and documenting the architecture around him with his camera. A master in his craft, he is an expert in taking ordinary subjects and making them extraordinary. After selling photo prints for many years, he set out into the NFT world with a small run of 1/1 art. Encouraged by his initial release selling so well, he created his first collection, Rowhomes, which put him on the map on NFT marketplace platform OpenSea.

Source: Opensea.io

For Rowhomes, Hytha photographed dilapidated houses in Philadelphia and applied his eye for architecture to meticulously add details and eerie backdrops to produce his highly sought 100-piece collection. Each drop sold out within minutes, and we’ve seen strong secondary sales from its inception as well.

His newest collection, Highrises, is currently being released in phases, with the second leg dropping just recently. A key piece of his strategy for Highrises was utilizing the Rowhomes collection sales as a whitelist to give his early collectors first dibs on his latest work. The success of that plan showed in the spat of secondary sales of Rowhomes before the Highrises drop. It will be interesting to see where his experiments take him next. 

Out of Context, Edition 1 of 1, by Chris Hytha

NFT & CRYPTO NEWS

GREG ADAMS

Digital Asset Specialist & Advisor

Phone: +1 (610) 908 2740
Email: gregadams@fineartgroup.com

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.

THE SCOOP #4 – JUNE 21ST, 2022

CRYPTO MARKETS

Bitcoin

Ethereum

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.

Source: Google Finance 

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.   

Tweet by Michael Saylor

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.  

Goblintown #3189 by goblintown.wtf

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 20th 

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 21st 

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 21st – 28th  
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 23rd 

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.

Murakami.Flower #8546 by Takashi Murakami

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 

GREG ADAMS

Digital Asset Specialist & Advisor

Phone: +1 (610) 908 2740
Email: gregadams@fineartgroup.com

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.

THE SCOOP #3 – JUNE 6TH, 2022

Welcome to the third edition of The Scoop!

CRYPTO MARKETS

Bitcoin

Ethereum

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. 

Cryptokicks by RTFKT and Nike

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

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 Collections

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 

GREG ADAMS

Digital Asset Specialist & Advisor

Phone: +1 (610) 908 2740
Email: gregadams@fineartgroup.com

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.

THE SCOOP #2 – May 20th, 2022

Welcome to the second edition of The Scoop!

CRYPTO MARKET

Bitcoin

Ethereum

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.  

*Opensea.io; Vertical bars are volume
Art Blocks Curated

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. 

#FreeHawaiiPhoto by Cath Simard

NFT & CRYPTO NEWS

GREG ADAMS

Digital Asset Specialist & Advisor

Phone: +1 (610) 908 2740
Email: gregadams@fineartgroup.com

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.