Vignesh Sundaresan, known to the cryptocurrency community as MetaKovan, made headlines in March for his record-breaking purchase of Beeple’s “Everydays: The First 5000 Days” NFT for over $69 million.
It’s a crazy dollar amount sure, but it’s also a tacit endorsement from the stratospherically wealthy patrons of the fine art world that blockchain-minted digital art is an acceptable medium.
Beeple may have attracted a higher premium than other artists of his class thanks to crypto enthusiasts aiming to use this wave of enthusiasm to prop up a new market for crypto assets and a new medium for blockchain, but it’s still a historic moment for the art world.
Christie’s auction notes that the sale makes Beeple one of the world’s three most valuable living artists. Christie’s detailed that the bids exploded in the artwork’s final two hours at auction, moving from nearly $14 million to over $69 million as the bids poured in.
As the founder of the Metapurse NFT project and a big spender in the space, you’d guess he’d be completely bullish on NFTs. But Sundaresan warns that those trying to profit off the tokens are “taking a huge risk,” he told Bloomberg.
NFTs, or nonfungible tokens, are unique digital assets, including jpegs and video clips, that are represented by code recorded on the blockchain, a decentralized digital ledger that documents transactions.
Each NFT can be bought and sold, just like a physical asset, but the blockchain allows for ownership and validity to be tracked.
While the market for NFTs has boomed this year, things have recently taken a turn. Sales volume for the tokens has seemingly subsided, with a decline in pricing as well. (Though not everyone believes NFTs are a bubble.)
Sundaresan is very supportive of NFTs, but, “I don’t think NFTs will hold the same kind of hype forever around high-value items,” he said.
“The market will get divided. There will be very few high-value items and an infinite number of very low-valued items.”
Similarly, Mike Winkelmann, the artist known as Beeple, compared the NFT market to the dotcom bubble. Just as certain companies, like Amazon, survived the eventual bust, and others did not, Winkelmann predicts that parts of the NFT market will thrive while others will wither.
“I’m very, very bullish on the technology and space long-term,” Winkelmann recently told CNBC Make It. “I just think people need to be careful right now because there [was] a rush and it’s so new. It is quite speculative.”
As Bloomberg pointed out, when Sundaresan was revealed as the eight-figure buyer of Beeple’s NFT, some speculated it was to drive up the price of his own NFT collection. But Sundaresan denied it, telling Bloomberg his motive was to “support the artist and showcase the technology.”
“The [Beeple] piece is going to take on a life of its own, that’s what makes NFTs really interesting,” Sundaresan told CNBC in March. “It may not just be a piece of art, it can become thousands of other things. But I won’t be selling it anytime soon.”
Sundaresan predicted that “there are going to be hundreds of thousands of people from around the world who are going to adopt this medium, a digitally native medium to monetize art,” he said.
“There is going to be an economy around it.”
The impact of the blockchain may have long-term effects on art auction houses beyond pure NFTs sales. It’s highly possible that these entities embrace NFTs as a trusted solution for indicating and transferring proof of ownership. The future of NFTs in the art world is certainly far from certain, but this is an explosive start.