From non-fungible tokens to online viewing rooms to metaverse-based auction houses, the future looks bright for digital art enthusiasts.
But can the traditional artistic investment in real life really be replaced?
Campden FB interviews Ori Ohayon (Head of Business Development and Capital Markets at Capital GDA and president of NFT BAZL), Howard Lewis (whose family formed the famous Schorr Collection) and Rupert Reid (director of his aficionado single-family office Valrock and NFT) on the rise and future of investing in digital art.
We are only at the frontier of a new asset class
Ori Ohayon [pictured above]: “A lot of promising technologies have come out, but I don’t think everything we’re looking at right now will necessarily be here even five years from now.”
Howard Lewis: “It’s basically the metaverse finding its feet. It’s kind of like looking at MySpace. 25 years ago, MySpace was on everyone’s lips. Today, if you’re under 35, you don’t you’ve never even heard of.
Rupert Reid [pictured right]“Where we are now with Web 2.0, which is about consumerism and sites owning your data, Web3 is about taking it back. »
An NFT is more than just digital art
Ori Ohayon: “An NFT is essentially a digital deed of ownership. When you start to think of them as assets, in the sense that you are able to transfer ownership of something of physical or digital value, then you unlock the potential of an NFT.
“The first NFT I sold was a physical painting. It was chipped with our NFT chips. So it is a blockchain authenticated physical painting and to buy it you need to use the online market. the [purchaser] found the process so seamless for the physical coin that he ended up buying the corresponding digital coin. It worked because there was a tangible component.
Rupert Reid: “Most people just think of an NFT as a JPEG you own. But it’s not the imagery, it’s the smart contract behind it. NFTs can be used to disrupt traditional verticals. reason why bored monkeys have been so successful, it’s because their marketing has been phenomenal. What you also get from them is access to a unique group of people, you access their [digital distribution platform] Discord and you have access to a closed group. If you own one of their NFTs, you are granted access to the owners section and can network with 10,000 people who can afford to spend $250,000 for a picture of a monkey.
NFT BAZL in Miami, 2021
Speculation versus art appreciation
Ori Ohayon:At least 90% of the market is speculation. [Boutique NFT marketplace] NFT BAZL is purely focused on investment art and true collectors. We don’t want people flipping those assets, because artists don’t want that – artists want their pieces to be appreciated.
“[It is often] a bunch of guys speculating that an NFT is going to explode, then they sell it. There aren’t many NFT markets really focused on quality versus quick money. The whole crypto space was founded on it. That’s why it became so popular because you heard of 12 year olds making millions of dollars. But now, once that stabilizes, I think you’ll start to see more people coming in because they value the asset.
Conservation and security of investments
Howard Lewis [pictured left]: “Although the [traditional] art market is not regulated, insofar as there are no official governing bodies, there are guardians who have been there for a very long time and who provide a kind of ballast. At the moment there are no real gatekeepers with NFTs, it’s almost like people are making it up as they go.
Ori Ohayon:“There are no keepers standing there saying, ‘Okay, that’s enough, let’s focus on quality’ – and that’s a huge space issue. I think everyone is just very greedy I think the key is going to be centralized decentralization – the blockchain with someone watching it.
Real life experience will never be replaced
Ori Ohayon: “I don’t think anyone will ever take away our desire for physical experiences. But I do think we will improve our ability to interact with people and art in a digital space. I don’t think the metaverses we have now are necessarily the right metaverses for this. But I think there will be a time when it will be advantageous for us to interact online.
Howard Lewis: “Online viewing rooms have now sprung up to help people who cannot travel freely. But there’s a lot to be said for being there. I don’t think the digital space is going to dominate because at the end of the day we are social animals and that physical engagement is going to remain paramount.
Rupert Reid: “I think there will always be people who want to see physical art. There is very little art for art in the NFT space right now.
Opportunity and future
Ori Ohayon: “I think we are about to enter a recession and where are people going to get their capital? It will be crypto and stocks and we are already seeing this hit happening. When people need money, they sell all these speculative investments. And I think the crypto market will be one of the first to take a smack.
“Where I think we’re going to have a ton of opportunity over the next two or three years is infrastructure. Buy the technology, invest in the creators, invest in the guys who have the underlying assets – like marketplaces, wallets, APIs [Application Programming Interface]…Because it’s going to be acquired and used to lay the groundwork for what’s next.