Sales of both art and collectibles NFTs exploded in 2021, reaching $11.1 billion in sales, up from $4.6 million in 2019, while the value of sales for art-related NFTs expanded over a hundredfold year-on-year reaching $2.6 billion, according to the “Art Market 2022” report.
The annual art market industry report published by Art Basel and UBS this week, for the first time, included a detailed section on the NFT market and its relationship with the traditional art market, including auction houses.
Resales made up 73% of the value of trading in art-related NFTs in 2021, while primary sales fell to 27%, the report said.
According to author Clare McAndrew, founder of Arts Economics, although there was earlier interest in NFTs in the art market from around 2018, they did not make a splash into the broader public until the March 2021 sale of Beeple’s Everydays, which was the third-highest auction price achieved by a living artist.
Sales of NFTs reached almost $18 billion in 2021, including $2.6 billion related to “art”, the report said, citing date from NonFungible.com. It noted however, that many of these sales are “very low value and being traded and resold by a limited number of people”.
For art NFTs, only 1% of them sold for more than $1,594, and the top 10% of traders accounted for 85% of transactions, between June 23, 2017, and April 27, 2021, per a study in Nature journal.
Auction houses, which have largely stood on the sidelines as art and collectibles NFTs saw substantial growth, are seeing an opportunity – while only 5% of the second-tier auction houses surveyed had sold NFTs in 2021, 28% had not but were planning to do so in the next one to two years.
Younger collectors are also spending more on digital art than their older peers, with millennials reporting the highest average ($410,000) among those who had purchased digital art in 2021 – a similar pattern seen in the traditional art market.