Auction houses, once heavily involved in the NFT market, are now turning back to cryptocurrencies to attract new buyers. Sotheby’s has announced that in February, it will hold its first auction in Saudi Arabia, where Bitcoin (BTC) and Ethereum (ETH) will be accepted as payment. This move comes amid waning interest in NFTs and efforts to find new strategies to revitalize the market, reports Tuo Luo Finance.
First Crypto Payment Auction in Saudi Arabia
Sotheby’s confirmed that at the upcoming auction in Riyadh on February 8, participants will be able to use cryptocurrency to pay for physical assets. The 119 lots include works by contemporary and classical artists, luxury items, and sports memorabilia, including a Cristiano Ronaldo shirt.
One of the key highlights will be a work by generative art pioneer Refik Anadol, created using data from space telescopes. The estimated value of the piece, "Machine Hallucinations — Space | Chapter Two: Mars," ranges from $800,000 to $1.2 million.
According to Sotheby’s, the introduction of crypto payments aims to expand the audience, particularly in regions with active digital asset users. This decision reflects the auction house’s attempt to adapt to changing demand and attract new buyers, including from the digital art sector.
NFT Market: Decline and Attempts at Restart
The NFT market, which attracted billions of dollars in 2021 and became popular among cryptocurrency investors, is experiencing a downturn. According to ArtTactic, only 12% of analysts expect growth in the NFT segment by 2025, compared to 73% in 2023.
At the same time, Sotheby’s and Christie’s continue to develop their digital platforms. Sotheby’s Metaverse and Christie’s 3.0 allow buyers and sellers to use cryptocurrency, but experts say interest in NFTs is fading. Despite this, Christie’s reports that their NFT sales reached $150 million, including commissions.
Renewed Interest in Cryptocurrencies in the Art Industry
The rising price of Bitcoin and Ethereum after Donald Trump's re-election has sparked renewed discussion about the role of cryptocurrencies in the art industry. Investors, once skeptical of digital assets, are showing renewed interest. In 2021, Christie’s sold Beeple's NFT collage "Everydays: The First 5000 Days" for a record $69 million. That same year, the Tron Foundation, led by Justin Sun, acquired Maurizio Cattelan's "Comedian" for $6.2 million, paying in cryptocurrency.
Despite these high-profile sales, many traditional art market figures remain skeptical. Art consultant Wendy Goldsmith stated that cryptocurrency buyers come and go just as quickly, and the traditional art market remains stable without their participation. On the other hand, figures like Masayoshi Son continue to invest in both digital and traditional artworks, using both fiat and digital assets.
Concerns About Cryptocurrency Payments
One of the main obstacles to adopting cryptocurrency payments in auction houses remains regulation and transparency issues. Cryptocurrencies are banned in China, and the EU has tightened Anti-Money Laundering (AML) rules. New regulations require auction houses to conduct thorough transaction checks, making it more difficult to accept digital assets.
Nevertheless, the growing interest in cryptocurrencies among younger collectors is pushing major auction houses to adapt. The average age of NFT buyers at Christie’s is 42, while the average age of traditional auction clients is 54. Christie’s new CEO, Bonnie Brennan, emphasized that attracting a younger audience is a key part of the company’s strategy.
Outlook for the Art and Cryptocurrency Market
The total sales volume at major auctions, including Sotheby’s, Christie’s, and Phillips, dropped by 26% in 2024, continuing a 19% decline in 2023. In these conditions, any new ways to attract buyers could prove useful, say experts. Despite the instability of the crypto market, major auction houses continue to seek ways to integrate digital assets, hoping to capitalize on growth opportunities if the NFT and cryptocurrency markets regain momentum.
Read also:
- Are NFTs Dead? Analyzing the Current State of the NFT Market
- 98% of NFT Projects in 2024 Failed — Report
- NFT Market by the Numbers: 2024
- “Crypto Czar” David Sacks Proposes Classifying NFTs and Meme Coins as Collectible Assets
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