NFTs are important in two ways: they embody a digital work of art, and they can also serve as digital evidence of a physical work of art. Almost two-thirds of all respondents now buy art or collectibles online.
And more than a quarter of art buyers plan to invest in NFTs this year. However, about eight in ten NFT buyers are more interested in returns than art. For almost everyone who has spent at least $22,500, ROI is the number one reason to buy NFT. Here are some of the findings of the new Hiscox report on the online art trade.
investments in the spotlight for NFT purchases
It turns out that more than eight in ten NFT buyers (82%) said they were more concerned about the investment than the art: 95% of those who spent 22,500 euros on NFT in the last twelve months said so was the return on investment. the main reason for their NFT purchase. 96% of male shoppers tend to buy NFTs for investment reasons. For women, it is only two-thirds (67%).
Moreover, the results of the study indicate a growing convergence between the traditional art market and the online art market. Nearly two-thirds of art buyers surveyed purchased art or collectibles online – an increase from the previous two years: while more than eight in ten existing online art buyers purchased works of art online in the last 12 months, this figure was 67% in 2020.
Online art sales have grown from €4.3 billion to approximately €7.1 billion in 2020. Online sales are expected to reach €12.2 billion in 2021. 84% of art buyers art now believe that the digital transformation of the art market will last; in 2020, it was only 51%.
“The online art trade continues to grow and is no longer just a laggard but has become an integral part of the art market, a true sign of market maturity. However, the same cannot be said for NFTs which are still in the “wild west” phase of their development – it is still a very speculative market, so we can expect a lot of ups and downs for now. .” says Robert Read, Director of Art and Private Clients at Hiscox.
In the NFT Gold Rush
Eight in ten NFT buyers (82%) said they focus more on investing than art. 95% of those who spent €22,500 on NFT in the last 12 months cited return on investment as the main reason for their NFT purchase.
Male buyers are primarily driven by returns on investment, female buyers less so: 96% of male buyers bought NFT art for investment reasons and 58% because of their passion for digital art . Far fewer women (67%) bought NFTs primarily for investment reasons; 76% bought them because of their passion for art – especially digital art.
The market is dominated by men, but we can expect more female buyers this year: less than a fifth (16%) of female art buyers surveyed said they had bought one or more NFTs, compared to 22% of male shoppers who said the same. However, 27% of female art buyers said they would buy an NFT in the next 12 months, narrowing the gap with male buyers (28%).
Sounding the waters: Among art buyers surveyed who had purchased NFTs in the past 12 months, 35% had purchased NFTs with a total value of less than $900, while 37% had spent up to $4,500 $ in NFT; only 15% had already spent more than 4,500 euros on NFT.
Art and NFT markets are converging
There are signs of growing convergence between the traditional art market and parts of the NFT market. More than a quarter (27%) of all art buyers surveyed said they would likely buy an NFT in the next 12 months.
Change is permanent: In 2020, 51% of art buyers said they believe changes in the way they buy art will be permanent. 18 months later, 84% of respondents believe that the digital transformation of the art market will be permanent.
Growth rates are in the double digits: online art sales have soared during the pandemic, from 4.8% in 2019 to 64% in 2020. Another strong sales growth of 72% for the first semester of 2021, which comes from online art sales platforms, led to online sales estimated at 12.2 billion euros for 2021. However, growth is expected to return to normal shortly. On the one hand due to the maturation of the online art market and on the other hand due to the renewed interest in in-person auctions after the pandemic.
The digital transformation of the art market
Auction houses are experiencing strong online growth: Heritage Auctions achieved online sales of €813 million in 2021 (up 79% from 2020). At Phillips, online-only auctions grew 70% last year, while Christie’s reported a 41% increase in online-only sales for 2021. Sotheby’s online-only sales rose 22% in 2021, after phenomenal growth in 2020 (824%). Despite slower growth in 2021, Sotheby’s accounted for 65.8% of the three auction houses’ online-only sales last year.
Buyer confidence increases
53% of online art buyers surveyed recently said the pandemic and the move of the art market to the internet has boosted their confidence in buying art and collectibles online, up from 42% in 2020.
Three in 10 young art collectors bought their first work of art online, up from 14% in 2020. And almost half of new art buyers who started buying art less than three years ago have made their first online art purchase; In 2020, it was 30%. The online art market has become a gateway into the art world for new art buyers who have never been to a gallery or auction house.
New Media Art Auction
Of all art buyers surveyed, 41% said they purchased new media art online in 2021, up from 17% in 2020. This matches the rapid growth of new media art released as of NFTs.
Digital passport for the work
“NFTs are important in two ways: they embody a digital work of art, and they can also serve as digital evidence of a physical work of art. traceability is often difficult with works of art, but very important for value – through which hands has a work of art passed, in which galleries has it been exhibited before? contemporary art are fortunate to have full provenance as a differentiating feature thanks to NFTs,” says Alina Sucker, Underwriting Manager Art & Private Clients at Hiscox.