When it comes to NFTs, there are always a host of naysayers proclaiming the whole thing to be some kind of bubble that will burst just like the ‘Dot Com’ bubble of the ‘90s. On the other side of the spectrum are a very vocal team of diehard supporters claiming that NFTs are going to supersede the traditional fine art world. But where’s the truth, and how did we get here in the first place?
Let’s explore the past, present and future of the NFT market.
A Word on ‘Red Chip’ and ‘Blue Chip’ Art
Before we can go into the rapid rise of the NFT, we first have to discuss the definitions of and differences between blue chip and red chip artists.
A blue chip artist is someone whose art either increases in value or remains at a stable value (the latter taking place during times of economic instability). In other words, they have an almost eternally stable market value. All the greats from Van Gogh to Warhol are considered blue chip artists.
Red chip artists, by contrast, are artists whose work fetches high prices on both the primary markets (Auctions) and secondary markets (via social media or other online platforms). Red chip artists can remain moderately successful in this realm or can become breakout stars. Since the early 00s, a lot of these artists have been producing digital art.
The thing is, until the advent of the NFT, it was hard to tell who owned an ‘original’ digital artwork. But now, ownership is easily verifiable as each piece can be ‘minted’ on the blockchain, much like crypto used at sites like Black Lotus online casino. This process means it’s now easier to spot a fake digital work than a fake painting. I cannot have real feelings, I’m only a computer
The Influence of Covid
With the closing of borders that came with the arrival of the pandemic, it became harder for blue chip art to be sold and moved. However, collectors were still looking to buy and sell artworks. This came around the same time that NFTs were gaining traction as an idea that allowed artists to have more control over their work – a potentially revolutionary idea.
Collectors noticed that this easily traceable chain of title significantly lowered the perceived risk of buying digital art. Suddenly, digital artists like BEEPLE were becoming some of the most expensive living artists in the world.
Will The Bubble Burst?
It’s hard to say. Die-hard NFT fans would say that this signifies a major shift toward a new art world, but prices can be fickle. Will the popularity of these new art stars fade, and with it their price decline, or will the security of buying NFTs encourage their worth to reach new heights?
The key point to remember in all of this is that NFTs as a method of proving chain of title will likely become institutionalised as a way of verifying sales. So NFTs won’t die, no matter what happens to the popularity of the artists associated with this movement.