Post-WWII art market surge: Following World War II, there was a dramatic surge in art sales as economies recovered and discretionary spending increased. Art became a status symbol for the newly wealthy. Peggy Guggenheim, Sidney Janis, Betty Parsons, and other leading collectors of that era broke new ground by supporting avant-garde art, not just as cultural assets, but also as potential financial investments. Their actions underscore that an innovative eye, a willingness to take risks, and a dedication to promoting groundbreaking art can yield influential and profitable collections.

Recession of the 1970s: Amidst the global economic downturn, many collectors refrained from collecting art. In contrast, savvy collectors like Leo Castelli, Robert Scull, and Virginia Dwan seized the opportunity to acquire quality art at lower prices. They not only recognized the rising talent, but actively invested in artists, providing them with financial security and allowing them the freedom to create without the immediate pressure of sales. They educated their fellow collectors about the importance and value of the art and fostered a strong community. This challenging yet transformative period shows that with the right approach, patience, innovative spirit, and a keen eye for talent, one can find value and opportunities even in difficult times.

Hype and bust (1980s): The 1980s saw a major influx of new money into the art market. Successful dealers like Larry Gagosian, with his business acumen and expansive global vision, built robust networks of collectors worldwide. Staging museum-quality exhibitions in his galleries and brokering major private sales, Gagosian built an enormous fortune and diverse art collection which helped him navigate the crash in the early 1990s. On the other hand, dealers who focused on niche art genres were forced to shut down as art sales declined. Speculation and hype are common in all asset classes, art included. One should be mindful of over-speculation and overpricing, and maintain a properly diversified portfolio to weather volatility.

The dot-com boom: The internet era redefined the art market, underscoring how new wealth and fresh perspectives can reshape artistic trends and market dynamics. As new tech entrepreneurs began investing in art, the taste shifted toward provocative and innovative works that served as ‘talking pieces’ such as Damien Hirst's preserved animals and Tracey Emin's unmade bed. Collectors like Eli Broad and Jay Jopling who recognized the shifting trends made enormous returns on their art investments.

The globalization of art (2000s-present): Despite economic crises, the top end of the art market remained resilient. The last decade saw the ten most expensive art sales of all time, including the $450 million sale of Leonardo’s “Salvator Mundi.” Fueling the high end has been the 2X increase in the number of billionaires and ultra wealthy buyers, particularly from Asia. Besides driving up prices for the top echelon of contemporary artists, these collectors also brought into spotlight the rising stars from around the world. Once again, those with a global outlook and an open mind toward diverse art forms benefited the most during the last decade.

Digital Art: The Next $1 Trillion Asset Class: Since its publication in March, our report was read by over 5,000 art collectors, private wealth managers, entrepreneurs, and investors. It’s the result of our colossal effort which included 100+ conversations with the leading artists, collectors, and entrepreneurs, and over 200 hours of research and writing. Lots of stats and insights into the digital art market: overview and breakdown of major digital art categories, market value of the top-100 collections, price changes since the release, performance comparison to financial indices, and more.

Studying past art collecting cycles

Art, as a reflection of society and its transformations, has always been intrinsically connected to the rhythms and cycles of the world it inhabits. The art market, as an extension of this creative ecosystem, likewise experiences fluctuations and cycles of its own. The study of these past art collecting cycles is not merely an exercise in historical observation, but a crucial endeavor that offers valuable lessons for the collectors of today and tomorrow.

By investigating the patterns, trends, and key figures that defined each cycle, we gain insights into the broader cultural and economic forces at play. The post-WWII art market surge, the recession impact on the art market in the 1970s, the 1980s boom and bust, the influence of the dot-com boom, and the evolution of the contemporary art market in the 21st century – each of these cycles presents a unique case study in the dynamics of art collecting.

Understanding these past cycles is instrumental in identifying future trends, making informed investment decisions, and appreciating the wider context in which the art world operates. It provides a framework to interpret the shifts in collectors' tastes, the evolution of art styles, and the commercial strategies adopted by gallerists and artists.

Moreover, examining the trajectories of successful collectors and dealers in each cycle reveals the strategic thinking, risk-taking, and vision that underlie effective art collecting. Their successes and failures serve as invaluable guides for aspiring collectors navigating the intricate and often unpredictable terrain of the art market.

In essence, the study of past art collecting cycles is akin to charting a map of the art market's history. It serves to inform, enlighten, and guide collectors, ensuring they make savvy, informed, and rewarding choices in their art collecting journeys.

Post-WWII art market surge (1940s - 1950s)

The Post-World War II period saw an international shift in the art world. As Europe was rebuilding from the war's devastation, the center of the art world transitioned from Paris to New York. This significant shift was accompanied by an increased appreciation for art and an upswing in the art market. Economic prosperity, particularly in the United States, led to a boom in the art market, making it a noteworthy cycle in the 20th-century art collecting scene.

Collectors' perception of art transformed dramatically during this period. Abstract Expressionism, characterized by its emotional intensity and non-representational nature, became the dominant art style. Artists like Jackson Pollock, Willem de Kooning, and Mark Rothko gained prominence. Their innovative approaches, along with the emotional depth of their work, drew significant attention and created a sense of excitement and investment potential around contemporary art.

Among collectors, there was a sense of patriotic duty to support American artists, which, coupled with the thrill of investing in the innovative and avant-garde, boosted the art market. Furthermore, art began to be seen not only as a cultural asset but also a financial one, with significant potential for appreciation. This perception was fostered by the prominent collectors and gallerists of the era.

Peggy Guggenheim, an American collector, gallerist, and art patron, played a pivotal role during this cycle. An heiress to a mining fortune, Guggenheim became one of the most influential art patrons of the 20th century. She was fearlessly committed to avant-garde art at a time when many collectors were still rooted in more traditional forms. Through her gallery Art of This Century in New York, she promoted the works of numerous Abstract Expressionist artists, including Jackson Pollock, Willem de Kooning, and Max Ernst (whom she married). Her collection, now housed in the Guggenheim Museum in Venice, includes many masterpieces of modern art. Guggenheim's commitment to the unfamiliar and the groundbreaking set a precedent for future collectors and helped to establish modern art's place in the art market.

Another influential figure was Sidney Janis. Janis, a successful clothing manufacturer turned art collector and dealer, was instrumental in promoting Abstract Expressionism. In 1948, he opened the Sidney Janis Gallery in New York, which quickly became a leading venue for contemporary art. Janis was known for his ability to identify and nurture talent. His approach was distinctive because he positioned his gallery as a mediator between avant-garde artists like Pollock, de Kooning, and Kline and an often-skeptical public, making modern art more accessible and appealing to collectors. He successfully bridged the gap between artists and collectors, fostering a greater appreciation for modern art.

Betty Parsons, an artist herself and known as the "den mother" of Abstract Expressionism, also played a crucial role in the Post-WWII art market surge. She operated the Betty Parsons Gallery, which represented many leading Abstract Expressionists, including Pollock, Mark Rothko, and Barnett Newman. Parson's novelty lay in her unwavering belief in her artists, often sticking with them even when their work was not selling well. Her artist-centric approach, coupled with her intuitive understanding of abstract art, allowed her to introduce and establish some of the era's most important artists.

The 1940s and 1950s were marked by increased interest in art as a collectible and an investment. The dominance of Abstract Expressionism, the shift of the art world center from Europe to the United States, and the rise of influential collectors and gallerists all contributed to the Post-WWII art market surge. The passion, risk-taking, and discerning eyes of these collectors and gallerists not only made them successful but also helped to shape the future of the art market.

Recession (1970s)

The 1970s marked a challenging period for the global economy, with the oil crisis and other economic factors leading to a recession. The art market was not immune to these financial hardships, experiencing a decline in sales volume and an overall slowdown. However, despite the less favorable economic climate, this period was crucial in shaping the modern art market and collectors' perspectives.

During the 1970s, conceptual art and minimalism were the dominant movements. Many collectors found these styles difficult to understand or appreciate, contributing to a somewhat stagnant market. Despite this, a few far-sighted collectors saw potential in these avant-garde art forms, recognizing that these pieces could become valuable over time. The artists themselves often challenged the traditional market structure, with some like Seth Siegelaub even attempting alternative models like artists' contracts.

Among the collectors, Robert Scull stood out. Alongside his wife, Ethel, Scull collected works by artists such as Jasper Johns, Robert Rauschenberg, and Andy Warhol. They often bought directly from artists and dealers, focusing on emerging talents. Scull was known for his shrewdness and was unafraid to sell works to buy others, making him an influential figure in this period.

Virginia Dwan is another significant gallerist from this period. Her galleries in Los Angeles and New York were instrumental in promoting minimalism and earthworks. She supported artists like Robert Smithson and Michael Heizer, often funding their large-scale outdoor projects. Despite the economic downturn, Dwan remained dedicated to promoting these groundbreaking art forms.

Among art dealers, Leo Castelli was the most dominant figure whose influence and innovation shaped the trajectory of the modern art world. Castelli opened his New York gallery in 1957, and throughout the 1960s and 70s, he introduced and promoted artists who would become some of the most influential figures of the 20th century, such as Jasper Johns, Robert Rauschenberg, Roy Lichtenstein, and Andy Warhol.

Castelli was unique in that he offered his artists a stipend or 'retainer', providing them with financial security and allowing them the freedom to create without the immediate pressure of sales. This was a significant departure from the standard model where artists were typically paid after sales were made. It allowed artists to focus on their work and was a sign of Castelli's long-term commitment to their careers.

His innovative gallery practices also included what are now considered standard industry norms, such as holding solo exhibitions for artists and publishing exhibition catalogs. These practices helped to build the reputation of his artists and place their work in a broader artistic and intellectual context.

Castelli was also noted for his ability to cultivate collectors and create a market for his artists. He was known for his charm and persuasive ability, educating his collectors about the importance and value of the art he was selling. In doing so, he fostered a community of dedicated collectors who were willing to invest in the new and often challenging art that his gallery championed.

The key to Castelli's success was building long-term relationships with his artists and investing in rising talent. His innovative gallery practices demonstrate the value of presentation and context in selling art. His ability to cultivate and educate collectors underscores the importance of understanding and shaping the art market. Lastly, Castelli's willingness to break with tradition and take risks illustrates the potential rewards of innovation in the art world.

In many ways, Leo Castelli redefined the role of the art dealer. His influence remains evident in the practices of many contemporary galleries, and his legacy serves as a model for those interested in the business of art.

The 1970s art market, while challenging due to the recession, proved to be a transformative period. It pushed the boundaries of art and tested the resilience of the market. Key figures like Robert Scull, Leo Castelli, and Virginia Dwan, through their innovative approaches and dedication to supporting artists, navigated this period successfully. Their actions during this time offer important lessons for aspiring collectors - that value can be found in difficult times, and that supporting innovative artists can lead to significant long-term rewards.

Boom and bust (1980s)

The 1980s was a decade of significant transformation for the art market. Characterized by a rapid expansion in the early years followed by a sharp contraction towards the end, this period holds important lessons about the cyclical nature of the art world.

The early 1980s were marked by an influx of new money into the art market. Economic prosperity, particularly in the United States and Japan, led to the emergence of a new class of wealthy collectors. These collectors were drawn to the art market not just for the cultural prestige it offered, but also for the potential financial gains. Art became seen as an investment asset, and prices for contemporary and modern art skyrocketed.

This period of prosperity, however, was short-lived. By the end of the decade, the art market experienced a significant crash, in part due to broader economic instability. Over-speculation and overpricing led to a market correction that saw a sharp decline in art sales and prices.

A key figure who navigated this boom-and-bust cycle successfully was the gallerist Larry Gagosian. Gagosian, often referred to as the most powerful art dealer in the world, has had a significant impact on the global art market. His journey in the art world began in Los Angeles in the late 1970s, and he rose to prominence in the 1980s, defining the era's art market with his aggressive and business-savvy approach.

Unlike Leo Castelli who was artist-centric, Gagosian focused predominantly on serving collectors. Known as Go-Go, Gagosian could obtain any artwork upon request and fetch the highest price, taking an enormous commission for connecting buyers and sellers. Gagosian had a grand global vision. He expanded his gallery operations internationally, opening spaces in key art market cities such as New York, London, and Paris. This global network allowed him to tap into a broader collector base and cater to the growing trend of international art collecting.

Gagosian also embraced a wide range of artists and styles, from established masters like Pablo Picasso and Andy Warhol to contemporary stars like Jeff Koons and Damien Hirst. His willingness to deal in both primary and secondary markets allowed him to capitalize on various segments of the art market.

Furthermore, Gagosian approached art dealing with a business acumen that was somewhat unprecedented in the art world. He employed strategies such as staging museum-quality exhibitions in his galleries and brokering major private sales. His ability to manage relationships with both artists and collectors and his knack for setting and riding trends made him particularly successful.

Mary Boone was another influential gallerist during this period. Her gallery, opened in 1977, was at the heart of the 1980s art scene. She represented artists like Basquiat and Schnabel, helping to propel them to international fame. However, unlike Gagosian, Boone's gallery was significantly affected by the market crash in 1990, showing the potential risks of over-reliance on a particular segment of the art market.

Overall, the 1980s art market boom and bust cycle is a stark reminder of the risks and rewards in the art market. It emphasizes the importance of understanding market dynamics, diversifying investments, and recognizing the potential volatility of the art market. The actions of dealers like Gagosian and Boone during this period offer valuable insights for collectors navigating the complex art market landscape.

Dot-com boom (1990s-2000s)

The Dot-Com boom of the late 1990s and early 2000s, which generated considerable wealth, had a significant impact on the art market. This new generation of tech entrepreneurs began to invest in art, introducing fresh tastes and a different approach to collecting.

The Dot-Com boom coincided with a surge in the popularity of contemporary art, which appealed to these new collectors' desire for innovative and provocative works. The focus was largely on the Young British Artists (YBAs), a loosely affiliated group known for their shock tactics and entrepreneurial spirit. Their high-profile, media-friendly acts, such as Damien Hirst's preserved animals and Tracey Emin's unmade bed, appealed to collectors interested in acquiring 'talking piece' artworks.

Among collectors, Eli Broad stood out. A businessman who made a fortune in housing and insurance, Broad started collecting contemporary art in the 1990s and quickly became one of the most influential figures in the art world. His Broad Collection includes over 2,000 works, many of which are loaned to museums.

On the dealer side, Jay Jopling, founder of the White Cube gallery, was particularly influential. A key supporter of the YBAs, Jopling represented artists like Hirst and Emin, helping them reach a global audience. Jopling's White Cube gallery became synonymous with the cool, conceptual work of the YBAs and their commercially savvy approach.

The impact of the Dot-Com boom on the art market underscores how new wealth can shift market dynamics and shape artistic trends. The success of collectors like Broad and dealers like Jopling and Gagosian demonstrates the importance of being open to new artists and movements, and the value of building strong relationships with artists. Their influence also shows the role that key individuals can play in driving and promoting new trends in the art market.

Contemporary art market in the 21st century (2000s-present)

The art market of the 21st century has been shaped by several factors including globalization, the rise of online sales, and the increasing influence of emerging markets. Despite periodic economic downturns, the upper echelon of the art market has shown remarkable resilience, with record-breaking sales for both classic and contemporary works.

Collectors' perception of art has evolved over the past two decades. There is an increased acceptance and understanding of the diverse forms that contemporary art can take. Additionally, art has solidified its place as a valid and potentially lucrative investment asset. The growing influence of emerging markets, particularly in Asia and the Middle East, has also brought new collectors into the fray, broadening the scope and reach of the art market.

Amidst the Global Financial Crisis, the art market took a severe dive. Sales plunged over 40% in 2009 compared with a market peak of $66 billion in 2007. Contemporary art was particularly badly hit, with sales in that category plunging almost 60%. Yet to the surprise, even astonishment, of some observers, the art market soon started a rapid return to rude health. By 2011 the value of sales had almost reached the record level of 2007, and they have remained between $56 billion and $68 billion in the years since.

The make-up of the market changed. The mid-level — defined as works selling between $50,000 and $1 million — was sluggish, and a large number of medium-sized and smaller galleries were shuttered. However, the high-performing top end exploded, fueled by the battle of billionaires to acquire trophy works by a few “brand name” artists.

The top 10 most expensive paintings of all time were sold in the 2010s at eye-watering prices above $165 million. They include works by da Vinci, Picasso, Rothko, Cézanne, Gauguin, de Kooning and Modigliani. Even when inflation is taken into account, a painting such as Van Gogh’s “Portrait of Dr Gachet” (1890), often seen as the pinnacle of the art market excesses of 1990, doesn’t make the cut. Its price would be about $137 million when corrected to today’s values. The climax was, of course, the $450 million sale of Leonardo’s “Salvator Mundi” (c1500) at Christie’s in 2018.

Asia was a major influence on the market. Asian buyers increased their spend by 50% throughout the 2010s and comprised more than 35% of global sales. Among the influential figures in the art world during this period is the Japanese collector Yusaku Maezawa. The founder of online fashion retailer Zozo, Maezawa has become known for his record-breaking purchases, including a Jean-Michel Basquiat painting he bought for $110.5 million in 2017. His approach to collecting, driven by passion and the desire to share art with the public, embodies the spirit of many 21st-century collectors.

Further fueling the high end has been the phenomenon of private museums, the playthings of billionaires. Some look like vanity projects, such as Filipino real estate mogul Robbie Antonio’s Museum of Me — boasting portraits of himself — while others contribute to the cultural life of their location, notably in places where the state cannot invest in the arts.

In summary, the early 21st-century art market is marked by globalization, the impact of technology, and an expanding collector base. The success of collectors like Yusaku Maezawa and dealers like David Zwirner and Larry Gagosian underline the importance of embracing these changes and adapting to the evolving dynamics of the art world. They demonstrate the benefits of a global outlook, an open mind towards diverse art forms, and the effective use of digital platforms in art collecting.

Select sources:

Boom: Mad Money, Mega Dealers, and the Rise of Contemporary Art, Michael Shnayerson

Boom amid the bust: 10 years in a turbulent art market, FT

The attractive illusion of art indices: Art indices, such as the Sotheby's Mei Moses Index and Artprice, often serve as the main reference for prospective investors. These indices estimate annual art market returns at 9%-15%, providing a strong case for including art in investment portfolios. However, they have inherent limitations. These indices primarily represent higher-value artworks, accounting for only a tiny portion of the art market. They rely on public auctions, overlooking private transactions that make up a significant portion of market turnover. Furthermore, unlike financial asset indices like the S&P 500, art indices are not investable, and replicating index returns is not feasible. As a result, they fail to accurately capture the investment experience of most art buyers. The complexities of transaction prices, positive skewness in returns, long holding periods, and concentration of art collections exacerbate the issue, creating a skewed impression of average returns in the art market.

Flashy headlines distort reality of art investing: While attention-grabbing nine-figure sales of individual artworks make headlines, they offer a distorted perspective of investment returns in the broader art market. A closer analysis of record-breaking auctions, such as the late Paul Allen's $1.6 billion auction, reveals underperformance compared to the stock market, with a 6% return versus the S&P 500's CAGR of 9% over the past 18 years. Similar results emerge when examining John Maynard Keynes' $100 million art collection. Despite being visionary collectors with substantial resources, their art investments performed worse than a typical 401(k) account. While the allure of art as an investment is undeniable, the true 'return on investment' for many may lie more in the joy of collecting and appreciating art than in its financial yield.

Digital art on the blockchain: a different asset class? As a nascent asset class, digital art on the blockchain holds potential differences from traditional art. It boasts efficiency and transparency, with lower barriers to entry for collectors. The collector base is more fragmented and diverse, including long-term holders contributing to market stability and speculators creating liquidity. With $1 million, one can create an investment portfolio representative of the current digital art market (collectibles: 72%; generative art: 15%; other art: 13%). While digital art has yet to prove itself as a store of value like traditional art, it offers the most compelling risk-reward among alternative asset classes, without the need for meticulous selection of individual investments.

Art is the oldest asset class in history

Art collecting goes back thousands of years and can be traced to various ancient civilizations.

Pharaohs in ancient Egypt amassed significant collections of art and artifacts. Many of these items were created for the purpose of accompanying them into the afterlife. The discovery of the tomb of Tutankhamun in the early 20th century revealed an extensive collection of such objects, including jewelry, statues, and the famous gold funerary mask.

Wealthy Romans were known for their extensive collections of art and other cultural artifacts. Many of these collections included Greek statues, paintings, and vases. Art was often used to adorn their homes and public spaces, showcasing wealth, power, and taste. A well-known example is the Villa of the Papyri in Herculaneum (a city destroyed, like Pompeii, by the eruption of Mount Vesuvius), which had an extensive collection of bronze and marble statues and a library of around 1,800 papyrus scrolls.

Collecting art and cultural artifacts has deep historical roots, reflecting a longstanding human desire to surround ourselves with objects of beauty and cultural significance. The Medici family in Florence (15th-18th centuries) is one of the most well-known patrons of arts who amassed an immense collection of art and rare books. They commissioned works from artists like Michelangelo and Botticelli, demonstrating their passion for the beauty and intellectual stimulation of the arts, while also highlighting their wealth and influence.

King Charles I of England (1600-1649) was an avid art collector who amassed one of the most extraordinary art collections of his age, including works by artists such as Titian, Raphael, and Holbein. For Charles, collecting art was not only about personal enjoyment and aesthetic appreciation, but also about projecting an image of wealth, taste, and power.

Isabella Stewart Gardner (1840-1924) was an American art collector, philanthropist, and patron of the arts. She amassed a significant collection of European, Asian, and Islamic art. Her collection, housed in the Isabella Stewart Gardner Museum in Boston, includes works by Titian, Rembrandt, and Vermeer. Gardner was driven by a deep appreciation for art and the desire to create a cultural institution for the American public.

The 5 P’s of art collecting

Art collecting has been a passion for many throughout history, and it continues to captivate new generations of enthusiasts. The motivations for collecting art vary greatly.

• Passion: Many people collect art simply because they love it. They find joy, inspiration, and personal fulfillment in the beauty and creativity that art provides. For these collectors, each piece in their collection often carries a personal significance and represents a unique aesthetic experience.

• Preservation: Art is a reflection of society and culture. Collecting art can provide a deep sense of connection to a particular culture, period in history, or movement. It also allows collectors to preserve and share these cultural artifacts with future generations.

• Prestige: For some, art collecting is a status symbol. Owning rare or important works of art can signify wealth, refinement, and sophistication. The social prestige associated with art collecting can be particularly attractive to some collectors.

• Profit: Art can be a potentially lucrative investment. Some collectors buy art with the hope that it will increase in value over time. While this is not a guarantee, and art markets can be unpredictable, there have been many instances of artworks significantly appreciating in value.

• Philanthropy: Some collectors view their art collections as a part of their legacy. They may plan to donate their collection to a museum or other institution, or pass it down to future generations. In this way, art collecting can be a form of philanthropy and a way to contribute to the cultural enrichment of society.

These motivations are not mutually exclusive. A single collector might be motivated by a love of beauty, the thrill of the hunt for a new piece, the desire for social prestige, the potential for financial gain, and the wish to leave a lasting cultural legacy. Each collector's motivations are as unique as the artworks they collect.

Art as an investment

While the rich tapestry of art collecting is woven from a multitude of motivations and personal passions, there is one strand that stands out for its practical and potentially lucrative nature – art as an investment.

This concept is not new; the wealthy patrons of yesteryears, from the Pharaohs of Egypt to the Medici family and King Charles I, were not only accumulating art for its aesthetic appeal or social prestige, but they were also, consciously or not, investing in assets that held their value over time.

The artworks they collected have not only survived through centuries but have grown exponentially in value. The gold funerary mask of Tutankhamun, for instance, is priceless today, and the artworks commissioned by the Medicis, some of which now adorn the walls of the Uffizi Gallery in Florence, are considered invaluable treasures.

Art as an investment becomes even more relevant in our modern economy. Over the last few decades, traditional assets like stocks, bonds, and real estate have been subject to dramatic fluctuations, leading investors to explore alternative investment opportunities. Art has emerged as an appealing option due to its potential for significant returns and its generally low correlation with traditional markets.

This was especially obvious in times of economic uncertainty such as the oil crisis in 1990, the dot-com bubble in 2000, the financial crisis in 2007-09, and the most recent COVID-19 pandemic. Investors actively sought out "safe-haven" assets that could retain their value. As one of the oldest assets, art, especially works by blue-chip artists, became widely regarded as the safe haven.

In the last 50 years, collecting art has become a strategic move, a method of wealth preservation and growth, and an opportunity to diversify investment portfolios. Hundreds of wealthy individuals have successfully amassed substantial wealth through strategic art collections. The late businessman and philanthropist Eli Broad and his wife Edythe owned an estimated $2.2 billion worth of art, including works by Jeff Koons and Cindy Sherman, which formed the core collection of the Broad, the art museum they built in Los Angeles. Likewise, the founder of the luxury group Kering François Pinault has been collecting contemporary art for over four decades. His collection, worth an estimated $1.2 billion, features over 3,000 works by artists like Damien Hirst and Jeff Koons.

Art collecting is on the rise

Art sales volumes reached $68 billion in 2022, second only to the 2014 result ($69 billion). Ultra-high-net-worth individuals with net worth of $30 million or more represented over 90% of art purchases. Around the world, there are nearly 200,000 of such ultra-high-net-worth individuals. These individuals on average allocate about 4% of their portfolio to art and other luxury collectibles.

Global art market sales: 2009-2022

At $1.7 trillion, art is a massive asset class, comparable in size to private debt ($0.8 trillion) and private equity ($3.4 trillion). The total value of art expanded nearly 10X in the last 50 years. Appreciation has been driven by three key global factors:

• growth in the purchasing power of the ultra-high-net-worth community (billionaire wealth has more than doubled in 10 years and reached $11.7 trillion in 2022)

• diminishing supply of available artwork (as it is acquired by museums and permanent collections), and

• international marketability of the asset.

Global Billionaire Population and Wealth 2008-2022

As the number of millionaires and billionaires continues to increase, so will the art sales and values. Surveys of HNW collectors by Arts Economics conducted in collaboration with UBS, showed that collectors were spending more in 2022 than they had prior to the pandemic, including a greater share at the high end of the art market. The proportion in the $1 million-plus range increased from 18% to 31%, and at the $10 million-plus level had doubled (to 12%). Seventy-seven percent of HNW collectors remained optimistic about the global art market in 2023. The surveys also indicated strong spending plans for this year, with a majority (55%) planning to buy art in 2023, including 65% in the US.

The shift of sales online is a major tailwind which is expected to drive art sales for many years to come. The share of online sales increased to 16% in 2022 from 9% in 2019. By making art more accessible online, there certainly has been more evidence of progress in the trend towards democratization. Online access to dealers, auction sales, and fairs has allowed much wider access to new audiences, with 40% of dealers’ online sales being to brand new buyers. Online bidding and buying have been identified as the key channel for gaining new buyers in the auction sector, as well as providing a means for existing collectors to access the market in more sustainable ways, without the pressure of attending every event in person.

Is art worth investing?

Art is an unusual asset for many reasons, including the owner’s emotional attachment to it. Nevertheless, if you are acquiring art for significant prices, it is an asset.

Collecting art is widely regarded as a lucrative endeavor. According to a report by Artprice, the global art market posted annual returns of 9% from 2000 to 2023. As a sales-based indicator, the Artprice index reflects a purely financial approach to art and reveals the hypothetical financial result one would obtain if they were to invest in the world’s top-selling artists to benefit financially from their success.

Masterworks, the company enabling fractional ownership of fine art, estimated an annual average return of contemporary art at 14% for the period from 1995 to 2020.

However, while these returns may seem attractive, they come with significant caveats.

• Lack of data: Art sales happen much less frequently than financial trades.

• Randomized perspective: Every piece of art is different. Therefore, it is difficult to compare how one piece sells with respect to another.

Although art indices play a significant role in helping investors better understand the art market, they are poor indicators of the attractiveness of the asset class. Art valuation and pricing are contingent on multiple variables based on the piece of work. Historical pricing data and trends provide ease for analyzing the value and demand of comparable artworks and artists, but it is important to understand the methodology used to construct indices.

The Sotheby’s Mei Moses Indices are widely recognized as the preeminent state-of-the-art market measure. Leveraging over 80,000 repeat auction sales for the same piece over time, Sotheby’s can produce objective art market analyses to complement the world-class expertise of its specialists.

A repeat sale, according to Sotheby’s Mei Moses Indices, compares changes in sale prices of the same artwork at specific points where the painting is sold. The Mei Moses Indices track all live and online auction sales at Sotheby’s, Christie’s, and Phillips for artworks that previously sold at public auction, going back roughly 200 years.

The index creators reasoned that repeat sales are a better way to track price trends for unique objects, such as art because they express price changes of the specific underlying assets rather than the average or median for the market. This helps minimize the effects of infrequent trading, reporting biases, or characteristic differences that can skew the data.

While this methodology provides a sound apples-to-apples comparison of valuation changes, there are multiple tradeoffs:

• Selection bias: The Sotheby’s Mei Moses indices represent a tiny percentage of the art market – namely higher value works of art. Hence, these indices need to expand to track the vast majority of the market. Moreover, art price indices are based solely on auction sales, even though private transactions through dealers and galleries make up about half of the art market’s total turnover.

• Survivorship bias: Often, only the most successful sales make headlines and are recorded in databases. Many artworks do not appreciate, fail to find buyers, or are sold privately without disclosed prices. This selection effect can give a skewed impression of the average returns in the art market.

• Intent bias: There can be a systematic difference between returns realized on purchases in the secondary (or resale) market relative to those in the primary market (when an artwork first comes up for sale, typically through a gallery or the artist’s studio). Prices in the primary market do not necessarily reflect the marginal buyer’s willingness to pay.

• Lack of liquidity: Selling an artwork can take considerable time and effort. The average holding period for artworks resold through auction houses is estimated at 25 years. Many are sold below their intrinsic value when the seller needs liquidity.

• High transaction costs: Auction houses and galleries often charge 30%-50% fees, and additional costs like insurance, storage, and transportation can eat into profits.

Indices help gauge the art market sentiment and trends. However, they are biased indicators of the investment returns which collectors could get. In contrast to financial asset indices like S&P 500, art indices are not investable and no implementable strategy can replicate index returns. Transaction-based indices typically are based on auction prices only, weigh each transaction equally, and measure geometric average price trends. As a result, they will not accurately capture the investment experience of most art buyers. The noisy transaction prices, positive skewness in returns (combined with long holding periods), and concentration of art collections amplify the problem.

The harsh reality of art investing

Instead of art indices, one should study portfolios of art over time to understand better the financial returns of the art asset class. A group of researchers from the University of Cambridge examined the long-run buy-and-hold performance of an actual portfolio, namely the collection of John Maynard Keynes.

Keynes is mostly known for his work in macroeconomics government policies. Curious about all financial assets, he accumulated a substantial collection of important artworks which he purchased through various channels between 1917 and 1945. Upon his death, Keynes bequeathed his entire art collection to King’s College in Cambridge. This collection consists of over a hundred pieces by both Modern Masters such as Braque, Cezanne, and Matisse, as well as friends and acquaintances of Keynes like Duncan Grant and Vanessa Bell. The collection has remained intact to the present day, with the pictures being hung at the College and at the Fitzwilliam Museum in Cambridge.

Importantly, Keynes was interested in art as an investment. He carefully and extensively documented his transactions and these records, held at the archives of King’s College. The collection appreciated strongly over time: while Keynes’ total expenditures amounted to less than £13,000, the collection had an estimated market value of more than £76 million in early 2019. This translates into a nominal internal rate of return (IRR) of 10.4% (6.1% in real terms).

The return is impressive. However, it is important to note that it is 0.2% lower than the performance of UK equities during the same period of time. Moreover, the bulk of returns were generated shortly after purchase, suggesting that Keynes was able to buy art at attractive prices. Adjusting for the first 10 years after the artwork purchase, the collection return over the last six decades was only 4.8% per year. Also, just like private equity and venture capital portfolios, Keynes’ portfolio returns were highly concentrated among the few artworks. The ten most expensive purchases represent 80% of his aggregate expenditure on art.

Eight- and nine-figure sales of single artworks certainly make front-page headlines, contributing to the general perception that art investing is profitable. The late Paul Allen’s art collection of 155 artworks fetched $1.6 billion in a record-breaking auction at Christie's in November 2022. Numerous individual pieces sold for more than $100 million each. Georges Seurat’s “Les Poseuses, Ensemble (Petite version)” went for $149 million. The work last appeared on the public market when it sold at Christie’s in 1970, where it realized more than $1 million. Cézanne’s La Montagne Sainte-Victoire, a colourful landscape painted from 1888-1890, sold for $138 million, another record. A Gustav Klimt 1903 painting, Birch Forest, set the high mark for a Klimt work, selling for $105 million. Van Gogh’s Verger avec cyprès sold for $117 million. Paul Gauguin’s 1899 oil on burlap Maternite II fetched $106 million.

These are certainly enormous sales. However, these numbers massively overstate the broader returns to art investment. The average annualized growth rate on the 11 lots with public entry prices was just 6.2%. On average, Allen held them for 18 years before selling them. By contrast, S&P 500 still boasts a compound growth rate of 8.9% over the past 18 years.

Paul Allen is among the top 1% top performing collectors. He was a true visionary, combining a great eye and deep pockets in the 1990s, when first-rate art was particularly cheap. This certainly challenges the notion of art being a great investment.

The double-digit art returns are rare and tend to be prevalent only in the very upper end of the art market. According to the research conducted by the University of Florence, since 2000, contemporary art delivered the highest return, 6%, but also the highest volatility, with a standard deviation of 19%, followed by modern art, with an expected return of 4% and a standard deviation of 14%, and by old master paintings, with an expected return of -1% and a standard deviation of 16%.

Momentum and success stories are a big driver of returns for the rising star contemporary artists. ‘If you had purchased certain established but undervalued female artists in the last five years, such as Rose Wylie RA, who is now with David Zwirner Gallery, you might currently be feeling like art is a great investment,’ says Sarah Barker, partner at the art law firm Withers.

While art can provide substantial returns and diversification benefits, it is not a straightforward investment. It requires a deep understanding of the art market, careful selection, and consideration of various biases and costs. For many, the joy of collecting and appreciating art may be the most reliable 'return on investment' they could ask for. However, for those with a keen eye for talent, an understanding of the art market, and a degree of patience, art can indeed be a lucrative investment.

Select sources:

On the Efficiency of Art Markets Evidence on Return Rates from Old Masters Paintings to Contemporary Art, University of Florence

Art as an Asset: Evidence from Keynes the Collector, research paper by David Chambersa, Elroy Dimsonb, and Christophe Spaenjersc

Buying Beauty: On Prices and Returns in the Art Market, research by Luc Renneboog and Christophe Spaenjers

The Artprice100 index of Blue-chip artists up 3% over 2022, Artprice

Investing in the Art Market: A $1.7 Trillion Asset Class, CAIA

Paul Allen's art didn't outperform the stock market, Axios

Art Indices & Why They Matter, Masterworks

The Art Market 2023, Art Basel & UBS

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For a long time, editions’ use cases were limited to providing an affordable entry point into artist worlds. Unlike unique collections pieces or premium 1/1s, editions weren’t seen as artwork that could accrue value. However, as NFT technologies evolve and their applications expand, editions are starting to take on the role of currency, unlocking new utility and rewarding holders.

Select artists have been consistently creating enormous value for holders of their editions. In the last 12 months, XCOPY, Guido Di Salle, and AlphaCentauriKid created over $20 million of net value for more than 4,000 of collectors.

Editions hit an inflection point last week when Proceed w/ Caution, an artwork by Lucréce that sold 8,408 editions, appreciated 10X in three days, creating almost 5,000 ETH ($8 million) of net value for collectors.

Hype or beginning of a new phase for digital art? I decided to find out.

Editions: taking the art world by storm

Editions – multiple copies (typically limited count) of the same artwork – have been very impactful for both artists and collectors. Priced at a significant discount to premium 1/1 art, editions allow artists to onboard hundreds of new collectors, without diluting the value of their work. Collectors, in turn, get a chance to collect pieces from most coveted artists at a fraction of the price of their premium 1/1 art.

One of the biggest trends in digital art has been proliferation of timed editions. Unlike the more standard limited editions, timed editions are available to mint in unlimited quantities for a set duration of time. Priced at an even lower price point, timed editions truly democratize access to highly sought after artists, allowing thousands of people to collect artwork, while demonstrating to the artist the true scale of the market and demand for their art.

Since November 2022, timed editions have been taking the digital art world by storm. More than 300 artists released timed editions, including 70 who grossed over 5 ETH ($6,000). Priced at $10-100, many artworks minted in thousands of editions.

Is this another hype cycle or do so many people really enjoy the art so much and want to own it?

Both are true. The rising wave of timed editions is, in part, reminiscent of the digital collectibles (PFP) boom in 2021. Many artists are jumping on the trend without a clear vision or reason, while speculators almost immediately list their editions for sale at a marginal premium. Same as 90% of PFPs, the majority of editions won’t be worth anything in the long run. In two months, over 90% of these editions saw no volume on the secondary market despite over 20% of them being listed for sale.

There have been several exceptions. In the last 12 months, XCOPY, Guido Di Salle, and Alpha Centauri Kid created over 13,000 ETH ($20 million) of net value for more than 4,000 of collectors. In the last two months, editions by emerging artists Charlesai, Pho, and CMPLX traded over 100 ETH ($160,000) and held their value. However, the one that truly defied anyone’s expectations is Proceed w/ Caution by Lucréce.

Lucréce: defying expectations

Proceed w/ Caution launched on January 18 and minted for 0.06 ETH ($100) a piece. In 15 minutes, 8,408 items were collected, raking in 504 ETH ($820,000) in primary proceeds. This is one of the highest grossing timed editions per minute, second to XCOPY’s Max Pain in March 2022 which grossed 7,469 ETH ($23 million) in 10 minutes.

It turned out that the mint was just the beginning. Shortly after the mint ended, Lucréce announced the next phase of the “game.” He invited collectors to “burn” their editions for one of the eight pieces. Same image. Eight different colors. The caveat: there could be no more than 1,051 of each piece.

(Burn = the process of exchanging an edition of one (or sometimes more) artwork for an edition of another one, typically rarer series, in which the original edition is destroyed.)

By setting the maximum limit on the number of each artwork, Lucréce established scarcity guidelines for each piece, but allowed his collectors to play with the economic element. Because the game was to collect the full set of eight different colors, collectors needed to choose which colors to mint and which colors to buy on the secondary. Once a certain color is minted out completely, its price is solely in the hands of holders who are inclined to set it high.

The burn was open for one week. In the end, 6,838 original pieces were burned for new colors. This is equivalent to 81% – an unprecedented engagement, even by web3 standards. (In the past, the project which demonstrated the highest level of engagement was Grails I by Proof Collective which consistently engaged 94% of its members in the course of one week.)

Lucréce editions traded 3,150 ETH ($5 million) on the secondary and gained 10X in 10 days. Proceed w/ Caution is now valued at 4,600 ETH ($7 million), standing firmly as the 3rd most valuable digital art edition of all time.

What happens next? There are 475 wallets holding 678 full sets of Proceed w/ Caution clearly awaiting for the game to continue. Would collectors need a full set to keep playing? What about those who hold 1-2 pieces? Would there be value for everyone?

One possible path is to maintain the deflationary dynamics, burning full sets and creating more scarce and therefore valuable artwork (i.e., in smaller edition sizes). This is what artist Jack Butcher did with his recent 16,031-piece Checks series.

In addition, Lucréce could create burn opportunities for holders of individual colors or even specific sets of colors, thereby engaging various pockets of his community. Photographer Guido Di Salle has been doing this masterfully for nine months, constantly onboarding new collectors, rewarding his most loyal patrons, and in the process creating $3 million of value for his community.

Next for editions: artist economies

Lucréce’s editions were among the top-5 trending digital art collections for over a week. They traded over 3,150 ETH ($5 million) on the secondary and engaged more than 5,000 collectors for hours every day. Conversations about Proceed w/ Caution dominated every art community, with hundreds of collectors discussing the burn, learning about Lucréce, exploring his artwork, and having a great time.

Connecting people over a shared mission (in case or Lucréce: passion for the artist) is the primary reason why NFTs are such a powerful technology. Completely programmable, they allow for more functionality to be embedded in them later on, allowing artists to fulfill their wildest dreams, reach more people, expand their families of collectors, engage them, and build strong bonds in the long run.

Editions are already allowing artists to understand who their collectors are and what resonates with them. Pioneers like XCOPY and Guido Di Salle who have released several dozens of artworks as editions possess enormous data on types of artwork their collectors love and what they value most. Constantly experimenting with scarcity and engaging their collectors in shaping their art series, they are finding unique ways to spread their art, scale their brand, and create enormous value for their supporters.

As NFT technologies evolve and their use cases expand, editions will take on the role of currency in these artist economies, unlocking new utility and rewarding holders in various unique ways, regardless of how early or late they joined or how much they paid for the art. And, as more collectors join and these communities grow, the value of artist economies will expand.

Based on its most recent price of 2.30 ETH ($3,700) as of January 23, 2023, By Way of Water by Kristopher Shinn is valued at 230 ETH ($370,000). This puts it among the top-15 most valuable photography collections on the blockchain.

How did the 1-year old collection rise so much so fast at such a difficult time in the market when over 90% of collections have failed to hold value?

By Way of Water: volume & price dynamics

Top photography collections by market value

Standing out in a crowded space

Web3 is evolving fast. Artists are pushing the boundaries of their creativity every day, exploring, experimenting, trying new things, and launching innovative work.

The bar to stand out and succeed is significantly higher today than it was a year ago. In 2021, the rising tide was truly lifting all boats. August 2021 was the strongest month for photography. Nearly 150 photographers launched their collections, selling out and grossing over 3,000 ETH ($10 million).

Fast forward a year and it’s significantly harder for artists to capture attention, let alone sell their work. There are 100X more artists sharing their work. Meanwhile, the market has shrunk, with sales down 90%. (In October-December, photographers grossed, on average, 600 ETH ($750,000) per month.)

Even artists with established reputations, sold-out collections, and strong families of collectors find it difficult to thrive in the current market. On the most recent episode of 100 Proof podcast, investor and art collector Derek Edwards highlighted three factors that successful artists do to drive attention to their work:

• They innovate and continue to make interesting work

• They build in public, network, and constantly expand their community

• They participate in conversations about the trends happening around their art

There are just a handful of photographers who have consistently remained in the spotlight. So when I saw By Way of Water by Kristopher Shinn having a resurgence in December I got curious and dove in to investigate.

By Way of Water

By Way of Water is a collection of 100 photographs by Kristopher Shinn that he shot riding the ferries in the greater Seattle area where his family lives.

Even without knowing the story behind the collection, viewers are instantly drawn to the diversity of stories unfolding on every photograph. They instill a sense of wonder and encourage viewers to dive deeper and learn more.

The first 30 photographs were released in August 2021. Collected by many of Kristopher’s fellow photographers, the collection slowly began to gain attention. Kristopher followed up with 20 more photographs in October and 50 more in January by which time he had strongly established himself as the “ferry guy.”

Rewarding early supporters

Selling artwork as an NFT is a big deal. Selling out a whole art collection is a colossal effort. Sustaining value, let alone growing value, is a very challenging.

The magnitude of what Kristopher Shinn was able to do – sell out 100 photographs at 0.25 ETH (~$1,000) a piece – cannot be overstated. Grateful for the enormous support from the community, Kristopher was determined to reward collectors that believed in him and bet on him early. The task was made even more difficult as the markets tumbled and sales volumes ground to a halt in the second half of 2022.

In December, Kristopher surprised his collectors with an artwork by one of the top trending artists Terrell Jones. Ferry Date was gifted to all 100 holders of By Way of Water and resold on secondary for as much as 1.35 ETH ($1,800). This is more than By Way of Water was worth before the surprise airdrop.

Kristopher followed up with three more collaborations – with Storm, Efdot, and Space Case. Artwork created by these highly regarded artists significantly expanded awareness about By Way of Water, attracting new collectors, creating value for existing holders, and exposing his audience to the four talented artists.

In one month, 16 new collectors joined the By Way of Water family, driving up the price to as high as 2.75 ETH ($3,500) and allowing select original collectors to lock in their gains. Moreover, the Ferry Date airdrop allowed By Way of Water collectors to partially take profits, as 20 collectors chose to sell the airdropped artwork.

With these high-profile collaborations, Kristopher Shinn built such strong momentum that if he launched a new collection today I have no doubt it would sell out instantly. This would not only allow Kristopher to expand his family of collectors, but also further extend the reach of his art brand, capture more attention, and therefore drive more value to his holders.

Kickstarting the value flywheel

There are various approaches to building multi-million dollar art brands. Some artists lean into scarcity. For example, DrifterShoots has built an $7 million art brand based solely on his Where My Vans Go collection. Only 125 pieces, with prices starting at $60,000.

In contrast, Guido Di Salle created $3 million of value by constantly onboarding new collectors. He maintains a balance of scarce and affordable work, constantly creating opportunities for his existing holders to obtain more exclusive art (some editions are limited to 30 pieces with prices starting at $2,000), while releasing new work in editions of 2,000+ for as little as $30 to onboard new collectors. As his network expands, every piece in his collection accrues value.

The strategy can be summarized in a simple flywheel:

• Reward collectors.

• Release new work.

• Repeat.

Repeating this cycle prompts the flywheel to spin, driving value to holders, both early supporters and those who joined recently. Repeated enough times, the flywheel starts creating more value faster. In the long run, it is possible for the ecosystem to sustain itself and grow on its own. I’ll explore this in a separate article about CC0 (Creative Commons) and artists building their brands by relinquishing their IP rights.

Building a lasting brand

The value flywheel is an effective strategy. It implies the artist pushing the boundaries of their creativity, spreading awareness about their work, and proactively creating value for their holders.

In the early stages, the spin of the flywheel is sensitive to the nature of rewards and their consistency. Kristopher’s By Way of Water surged to 2.30 ETH in one month. However, would it continue to appreciate, let alone maintain its value, in the absence of future collaborations and airdrops? The price would probably settle above the original floor of 0.88 ETH, but I doubt it would sustain its current level.

Kristopher says there are more collaborations coming. As a big collector and supporter of other artists, Kristopher secured collaborations with artists whose work he’d collected himself, including Pop Wonder (ATH of 59.6 ETH), Juice Bruns (6.9 ETH), Natasha Chomko (3 ETH), DeltaSauce (2.3 ETH), SIGMA-X (1.3 ETH), and other high-profile creators. Besides sourcing these collaborations, Kristopher is actually investing his own capital into commissioning these artworks and splits future royalties 50/50.

Regardless of where the value goes from here, Kristopher’s collaborations are an exciting experiment to watch. I look forward to seeing collaborations he creates next and whether he starts rewarding holders of his other collections. And I have no doubt that if his experiment proves effective and sustainable, we’ll start seeing more artists collaborating with each other and expanding value for their communities. The massive wave of open editions is certainly calling for novel experiments.

It’s similar for artists. The very best who are widely recognized and whose work is highly sought after show up consistently. They swing for the fences, not afraid to be misunderstood or laughed at. They experiment, make mistakes, and push the boundaries of their creativity not only to stand out, but also to contribute to the space that’s created an opportunity for them in the first place.

For every 50 artists that enter the space and gross 1 ETH ($1,300), there is only one that rises to stardom. Web3 is a competitive space. Many gain momentum, but very few are able to sustain it and build on it.

Fashion photographer Guido Di Salle is an innovator who has consistently tested his limits. He’s vocal and opinionated. He’s daring and controversial. Staying true to his vision, Guido has built one of the most powerful brands in web3, inspired and supported hundreds of his fellow artists, and created enormous value for his collectors.

Fashion photographer who shot for GQ and Playboy, Guido Di Salle is the top-10 highest grossing photographer in web3. In two years, he earned over 600 ETH ($1.5 million). His collections traded over 1,000 ETH ($1.5 million) on the secondary market. His body of work which comprises two collections, multiple editions, and premium 1/1s is valued at 3,800 ETH ($5 million).

What’s even more remarkable is that Guido created 3,100 ETH ($4 million) of net value for his collectors, i.e., those who believed in him and supported him early on. One third of this value, i.e. 1,200 ETH ($1.6 million), came from his premium 1/1s on SuperRare as they appreciated from 3-4 ETH in August 2021 to 55 ETH a year later. Two thirds of the value resulted from the elaborate game Guido has been playing with his editions holders for almost a year.

Editions Hit the Mainstream

In the traditional art world, editions are copies of the original master artwork and made in batches of a set size. They are often signed or sanctioned by the artist. In digital art, specifically NFTs, there have been two main types of editions: open editions (uncapped set size available for purchase during a specific time frame – as short as 10 minutes, as long as 7 days) and limited editions (capped set size, available for purchase until completely sold out).

Although open editions have existed since 2020, they only captured the mainstream attention in December 2022. Struggling to sell their premium 1/1 work in such challenging market, many artists introduced their work as low-priced editions, making their work more affordable and therefore allowing more people to collect their work. Manifold and Nifty Gateway, platforms that provide tools to launch art on the blockchain, helped artists gross over $10 million in the last two weeks of the year.

The majority of these editions followed the same playbook – available to mint for 24-72 hours, large mint count (100+), low price ($50-100), chance of “burn” in the future, thereby incentivizing collectors to buy more than one piece. (In NFTs, burning means exchanging an edition from the original art series for an edition from a new series. The “burned” NFT seizes to exist, thereby reducing the count in the original series.)

Of 100+ major editions released since December, over 80% haven’t held value. Listed below the original mint price, there has been no demand for these editions as indicated by the lack of secondary sales or even bids from buyers. Hence, unlike premium 1/1s or unique pieces from collections, editions have been poor investments and store of value, and have been primarily means to collect art out of pure enjoyment and support artists.

Guido Editions: Standing Out In a Crowd

At a first glance, Guido editions are like all the other ones in the market. They are, first and foremost, art that is meant to be appreciated in its purest form. However, unlike 90% of editions, Guido’s have consistently captured attention and accrued value. If you have been following Guido’s editions game, i.e., minting, collecting, and burning editions along the way, you’ve netted 5 ETH of profit in less than a year. Guido editions are the 3rd most actively traded photography series of all time, with over 1,000 ETH of volume in the last 12 months.

Guido editions are one of the largest art collections on the blockchain and include 28 unique photographs. Some are ultra rare editions of 8. Others count as many as 9,000 editions. There is a common thread across all 28 photographs – they are part of the same game in which collectors are offered to exchange (i.e., “burn”) the photographs they own for new ones, and new photographs are introduced only to be burned in the future.

Why do this? Editions are an effective way for an artist to expand their family of collectors by decreasing the cost of entry for their aspiring patrons. Introducing the burn mechanism helps grow and strengthen the artist-collector relationship over time.

• Choice: Collecting art is personal. Introducing new editions and giving collectors a choice – keep the photographs they own or swap for the ones they love more – is an effective way to build a deeper relationship in which collectors become cocreators of the artist’s universe.

• Exclusivity: By exchanging photographs from one series, collectors receive photographs from the series that has a lower mint count and is therefore rarer. Typically, two or more photographs are required to obtain one from the new series.

• Value: By allowing collectors to upgrade to rarer series, Guido involves his collectors into the process of value creation. It’s up to collectors to decide if they want to hold on to the original piece or obtain the new one. While the new ones tend to be more scarce (i.e., have lower mint count) and hence more valuable, the old ones have the provenance of being an earlier work, see their supply decrease as editions are burned for new work, and accrue value over time.

Sicilian Kiss: The Journey Begins

The game started with Sicilian Kiss, an open edition which was a free mint (mint means sale), in April 2021. Guido had already become the top grossing artist whose work, fetching 50 ETH ($150,000) a piece, was out of reach for 99.99% of collectors. Even his limited editions Sending My Love were selling for over 1 ETH ($3,000). Sicilian Kiss was a gateway into Guido’s world for those who aspired to own his artwork but couldn’t afford it. Moreover, sharing his work for free, Guido made a strong statement directed at thousands of greedy collectors demanding utility from artists.

14,812 Sicilian Kisses were collected by over 10,000 people in five hours. The price climbed to 0.03 ETH ($60) by the end of the next day. Even if someone missed the free mint, they could still buy as many Sicilian Kisses as they wanted at a reasonable price.

Collectors were soon rewarded. A month later, Guido announced an opportunity to exchange 10 Sicilian Kisses for a set of four editions (Meet Me & L’Estate series), four photographs Guido took on a trip to Sicily with his father in 2016. Collectors rushed to scoop up Sicilian Kisses on the secondary market, driving up the price from 0.03 ETH ($60) to 0.06 ETH ($120). In the end, 4,050 Sicilian Kisses were exchanged for 405 sets of four shots.

Two months later, Guido hinted that in the future there would be opportunities to swap Meet Me & L’Estate series for new editions. Collectors began to realize that Sicilian Kiss wasn’t a one-off experiment, but rather the beginning of a thoughtfully curated journey to share his passion for art, engage and reward collectors, build a strong community, and have fun along the way.

Collection Grows. So Does the Community.

As promised, Guido continued to release new work. As collectors engaged in the editions game, swapping Sicilian Kisses for new photographs, the supply of the existing editions fell and their prices rose. Meanwhile, the new series were fetching a premium because of their lower supply.

Between November and January, almost 6,000 Sicilian Kisses and 320 editions of Meet Me series had been swapped for new editions. Meanwhile, Guido launched two new open editions – Monkey Business and New Years Resolution, 2023 – which also kickstarted their own editions games.

In nine months, Guido expanded his collection from two photographs to 28. Hundreds of holders voiced their concerns that Guido was releasing too much new work and diluting the supply. The fact of the matter is that the opposite was happening. New work attracted new collectors as they found something with which they resonated more. They collected it and shared about it on Twitter, raising awareness of the Guido editions.

Despite the new work being released, the total supply of editions continued to decrease. Sicilian Kiss which started with 14,812 editions saw its count shrink by 40% to 9,009. What started as a free mint effectively became the currency in the Guido universe to obtain new work and, most importantly, shape the future of the collection.

50+ photographers rose to stardom in 2022, earning over 50 ETH ($100,000) despite the difficult market. Over 100 photographers joined SuperRare and sold their work through the premium platform. 47 photographers fetched over 5 ETH for their 1/1 work and 40 photographers set new ATH records. Overall, photographers grossed 13,000 ETH, or $27 million, of which 10,000 ETH was earned by the top-50. Although earnings concentration remains high, it declined steadily since September.

90% of collections lost value. It was a difficult year for collectors. Over 90% of collections lost value as the liquidity dried up in the second half of the year. Only 10 major collections traded above their 2021 levels. Drift’s iconic collection Where My Vans Go continued its meteoric ascend reaching 43 ETH floor as of the end of 2021. Dave Krugman’s colossal 1,011-piece collection Drip Drop released earned 2.5X collectors who bought into it at mint in May. Monaris, Samantha Cavet, and Billy Dinh saw the value of their collections appreciate 2X-3X.

2022 laid a strong foundation for future growth of photography on blockchain. We now have 3,000+ collectors and 1,000+ photographers earning a living. Six photographers sold their work at the prestigious Christie's and Sotheby's auctions. Five photographers debuted digital collectibles on Instagram selling out in under 10 seconds. Photographers experimented with other mediums such as AI and generative art. Artists founded startups, launched galleries, and built communities, forming a strong foundation for thousands of creators to thrive in web3.

Sales reached 22,000 ETH, or $47 million, which is 33% more than 17,000 ETH, or $53 million, in 2021. The second half of 2022 was understandably difficult, with total sales of 8,500 ETH vs 13,500 ETH in the first half. 3-month trailing volumes declined 64% in 4Q versus the peak in April.

Royalties weren't a sustainable source of income for photographers for two reasons.

First, liquidity dried up significantly in the second half of the year as the market slowed down. Share of secondary sales as % of total volumes dropped from 58% in 1H22 to 31% in 2H22. Second, secondary sales were dominated by ten largest collections which accounted for 85% of total volumes. Hence, 800 ETH of royalties which photographers earned in 2022 were largely concentrated among select few artists.

Over 50 photographers earned 50 ETH ($100,000) or more in 2022. Overall, photographers grossed 13,000 ETH, or $27 million, of which 10,000 ETH was earned by the top-50. Although earnings concentration remains high, it's been steadily declining since September.

Isaac “Drift” Wright topped the list of highest grossing photographers in 2022. His open edition First Day Out released in April grossed over 2,000 ETH in 24 hours. Dmitri Cherniak’s collaboration with the estate of László Moholy-Nagy produced the highest grossing collection of 100 generative photographs which grossed 2,500 ETH in a Dutch auction in December. Onboarded by Fellowship Studio, legendary photographers Guy Bourdin and Gregory Crewdson released their iconic work on SuperRare and became top-5 grossing artists on the platform. In partnership with Sotheby’s, acclaimed Brazilian photographer Sebastião Salgado released the largest collection of 5,000 photographs in September, grossing almost 1,000 ETH.

2022 was a difficult year for collectors. Only 10 major collections traded above their 2021 levels, with 90% of collections losing value in 2022.

Drift’s iconic collection Where My Vans Go continued its meteoric ascend reaching 43 ETH floor as of the end of 2021. Photograph #0 was auctioned off for 100 ETH setting the record for the collection. Dave Krugman’s colossal 1,011-piece collection Drip Drop released earned 2.5X collectors who bought into it at mint in May. Monaris, Samantha Cavet, and Billy Dinh saw the value of their premier 1/1 work appreciate 2X-3X which drove the demand for their debut collections.

2022 was a blockbuster year for editions which grossed photographers 2,600 ETH, or $7.2 million. Excluding Drift’s 10K open editions which grossed 2,000 ETH in April, photographers netted 600 ETH from the sale of editions in 2022.

Top-10 photography editions increased in value 2.5X. The majority of editions which accrued value are those released by artists in the early part of the year. Among them are Guido, Cath Simard, Reuben Wu, Jord Hammond, Ayla El-Moussa, and Billy Dinh. Summer Wagner, Brooke DiDonato, and Israel Riqueros released their editions in the final two months of the year and saw their value skyrocket driven by the artists’ strong momentum with their 1/1 artwork.

Fifteen photographers set new ATH for their premium 1/1s on SuperRare in 2022. On average, their ATH prices increased by 61%.

SuperRare onboarded over 100 new photographers onto its platform in 2022, over 90% of whom had their first sale.

Among the standouts and artists with strongest momentum on SuperRare in 2022 are Ben Zank (1 ETH → 17.3 ETH), Ben Skaar (2 ETH → 9.2 ETH), Cyber Yuyu (4.5 ETH → 9.1 ETH), Samantha Cavet (4 ETH → 8.1 ETH), and Brooke DiDonato (2 ETH → 8 ETH). Legendary photographers Guy Bourdin and Gregory Crewdson set records for their 1/1 work, fetching as much as 50 ETH and 25 ETH, respectively.

Six photographers sold their work at most prestigious auctions in 2022. Drift sold his artwork at Sotheby’s for £201,400, more than 10X its high estimate. Diana Sinclair grossed almost $100,000 from the sale of her artwork at Christie’s. Reuben Wu exhibited his work at Sotheby’s Asia, while top-10 photographers Cath Simard, Ayla El-Moussa, and Dave Krugman auctioned off their work through Christie’s recently launched web3 platform at Art Basel Miami.

One of the most important developments was Instagram’s entry into web3. The social media giant launched its platform to mint and sell digital collectibles. Drift became the first creator to offer his work to Instagram users. Priced at $999, 50 editions of his photograph grossed sold out in 10 seconds. Three other photographers who followed suit – Diana Sinclair, Dave Krugman, and Eric Rubens – experienced similar demand, selling out their editions in under 10 seconds.

As difficult as 2022 was, the year laid a strong foundation for future growth of photography on the blockchain. We now have over 3,000 collectors and 1,000 photographers. Over 100 photographers debuted on SuperRare. Over 50 photographers earned $100,000+. Christie's & Sotheby's became active players in the space. And there is so much more to celebrate.

There is a lot of work yet to be done. To create a truly global digital art market that is fair and equitable and 100X larger than today, we need to make it attractive, engaging, and safe for millions of those who are not yet in crypto to enter the space. Anybody can make a difference by educating their friends and colleagues about web3 and the new generation of art, sharing about artists you admire, taking them to exhibits (IRL and online), helping them buy their first artwork on the blockchain, and more.

The majority of people in web3 are motivated by short-term profits. As volumes dried up, many of these speculators left the space, dumping grails at bargain prices. This was a unique opportunity for collectors with dedication and long-term mindset to pick up some of the most significant works in the history of photography on the blockchain. In traditional photography, it takes 10-20 years for artwork to accrue 2X, 5X, and even 10X value. It’s still early days for photography on the blockchain which I’m certain will follow in the same footsteps.

NFT photography has become a $50 million market in less than two years. Impressive result for a category that didn’t even exist two years ago. Since JN Silva’s debut drop in December 2020, over 1,000 photographers entered the space and connected with over 3,000 collectors. NFT photographs have been auctioned off at Christie’s and Sotheby’s fetching as much as $2 million. Some of the most acclaimed photographers in history like Bruce Gilden, Gregory Crewdson, and Joel Meyerowitz shared their works with crypto collectors. Hundreds of artists collected from their fellow creators, elevating each other, aligning on their shared vision, and succeeding together.

Creativity in NFT photography is unbounded. Besides making amazing art, many artists have founded startups, launched galleries, and built communities, forming a strong foundation for thousands of creators to thrive in web3. It’s inspiring to watch artists embrace and experiment with the latest crypto technologies (fractionalizing their art, forming DAOs); collaborate with painters, musicians, animators, and coders; build off each others’s work; reach and engage with collectors in novel ways; form communities around important causes and fulfill visions together. Started by artists, platforms like Quantum, Obscura, and Fellowship helped 2,000 people collect their first photographs, welcomed 100 most iconic photographers into web3, forged most supportive communities, and built a powerful infrastructure for artists to thrive.

The 25 leading photographers have seen their work appreciate 5X handsomely rewarding their early supporters. In less than two years, 100 photographers netted $40 million from selling their work and earned $5 million in royalties. Despite the crypto market slowdown, photography sales have remained strong, down 35% from the market peak in April. Premium 1/1 photography is on a tear, with sales on SuperRare breaking records and 20 artists setting new all-time highs. Photography has not only been a great store of value, with 70% of the biggest collections trading above their mint price; but also created enormous wealth for collectors (top-25 collections are, on average, 5X above their mint prices; while Where My Vans Go and Twin Flames are up 200X).

Despite the impressive results for the industry, there are many problems yet to be solved: not enough collectors, life-changing earnings not available to 95% of photographers, and lack of diversity. Earnings are highly concentrated at the top. Ten highest grossing photographers accounted for 39% of primary proceeds, while the top-100 captured 77% of sales. Female artists accounted for only 15% of all sales volumes. In two years, only 60 photographers grossed over $100,000. With the market slowdown, the situation is even more dire: while the top-10 photographers each grossed, on average, $150,000 over the last 3 months, the next 40 earned less than $15,000. As inspiring as it is to see the leading artists find new home for their work during these difficult times, we have a long way to go to empower thousands of photographers to make a living in the crypto space.

Must-read articles

Interview with Ryan Koopmans

Justin Aversano: A Twin Flames Odyssey

Cath Simard: rai environmental awareness

Alejandro Cartagena: inefficient NFT photography market

Must-listen podcasts

Drift: My Story

Dave Krugman: Endless Possibilities

JN Silva: Redefining Photography Through NFTs

Justin Aversano: Unlocking Real-World NFT Community

Must-follow Twitter accounts

Quantum Art (premier curated photography platform)

AlphaTrilogy (biggest photography collector and tastemaker)

Alejandro Cartagena (art historian, insightful thinker, co-founder of Fellowship)

Dave Krugman (street photographer, community builder, world traveler and foodie)

NFT photography in 5 charts

Chart #1: Total photography sales

Chart #2: Main drivers behind photography sales

Chart #3: Top-100 photographers

Chart #4: Photographer earnings concentration

Chart #5: Performance since the mint

Photography on the blockchain

Photographs can provide glimpses into life in the past, long-ago events, and forgotten places. They can help shape our understanding of culture, history, and the identity of the people who appear in them. Photography has been utilized in these ways, and perceived as a tool of accurate and objective documentation.

Photographs can also be powerful tools for telling stories and chronicling events. Their context and presentation can greatly influence the way we understand everything from historical narratives to current cultural issues and situations.

Photographs, then, are a precursor, a primitive, to blockchain technology. The overlaps between the two are astounding as both accomplish the same task – marking time and state in an immutable chain. NFTs and photography are a match made in heaven, and yet, despite this, it took the crypto community several years to embrace photography.

Humble beginnings

In December 2020, art on the blockchain was still very niche. SuperRare had just crossed $4 million of cumulative sales; an XCOPY was going for less than $5,000 (10 ETH); and Snowfro was still minting Chromie Squiggles for ~$20 (0.035 ETH) a piece. The only two collections that were slowly gaining momentum were CryptoPunks and Autoglyphs fetching $5,000-$20,000 (10-40 ETH) a piece.

In the midst of this, abstract artist ThankYouX and street photographer JN Silva who had been in crypto for several years were exploring ways to create something special. The result of their collaboration was a 16-second video clip portraying one of Silva’s still images of Manhattan being beautifully infiltrated by flowing blocks of ThankYouX’s cube art.

Two 1 of 10 editions, an open edition, and a 1/1 were launched on Nifty Gateway on December 30, and grossed $70,000. A record-breaking drop at the time!! A drop that outdid 3LAU x Slime Sunday’s collaboration a month earlier.

The significance of “Thank You New York” cannot be overstated. It not only put photography on the NFT map, but also demonstrated what photography can be in the new age. It will be another year before the photography community embraces editions. It will be a year and a half before Drift launches the first ever open editions. It will be a while before photographers start collaborating with one another and explore mixed media projects. JN Silva and ThankYouX were way ahead of their time.

The birth of collections

Following JN Silva’s drop, photography began to gain traction. Clubhouse rooms filled up fast with photographers looking to learn more about NFTs – what they were, what they meant, how they worked. The idea of creating art, doing what you love, being paid for it, and, most importantly, keeping (almost) all of it was revolutionary.

One such artist attending countless Clubhouse rooms followed his curiosity several steps further and reached out to a big collector who had sparked lots of chatter because of his record-breaking NFT purchase. Justin Aversano had been exhibiting Twin Flames at various galleries all over the country for three years. The collection of 100 twins drew significant interest. Collectors were interested in acquiring select pieces, but Justin insisted that all 100 images stay together. After seeing a tweet from Gmoney about spending $150,000 on a CryptoPunk, the most anyone had paid at the time, Justin asked him if he’d be open to buying all 100 Twin Flames. Gmoney loved the collection, but, being less interested in physical prints, suggested that Justin mint them as NFTs.

On February 18, Justin launched Twin Flames, the largest photography collection on blockchain at the time. Priced at $1,000 (0.55 ETH) a piece, the collection sold out in 6 days, at the time when photography was still very niche. What’s more, Twin Flames spearheaded a secondary market which didn’t exist for photography at the time. Over the next month, Twin Flames resold for as high as 5 ETH (up 10X from the mint price) and did 40 ETH in secondary sales. 

August mania

The rapid ascend of Twin Flames encouraged more photographers to mint their work on the blockchain, as well as captured collectors’ attention. Minting artwork as NFTs at the time was cumbersome and expensive, but the promise of earning multiple times more for selling artwork was a strong motivation for hundreds of photographers.

Foundation was the easiest way for artists to get started in the space, and the platform played a huge role in onboarding the first generation of photographers. Billy Dinh, Monaris, Drift, and hundreds of photographers we know today minted their first artwork on Foundation in April. Meanwhile SuperRare, which was curating artists itself, was creating a premium market for photography, onboarding such legends as Reuben Wu, Jacob Riglin, Ryan Koopmans, Brendan North, Till Janz, and Cath Simard.

That summer, as NFTs were entering the zeitgeist , photography began to rapidly gain momentum. After recording over 300 ETH of sales in June, photography volumes surged 5X in July and then further 4X in August. Hundreds of photographers were finally selling their artwork directly to collectors bypassing the gatekeepers. Collections were selling out in days and, in some cases, even hours. Over 50 collections that launched in August grossed over 10 ETH and did over 20 ETH on the secondary market. Floors were rising 10X within the first week. Seven Twin Flames were resold for over 100 ETH, and one fetched 200 ETH.

Photography volumes exceeded $20 million (6,000 ETH) in August which at the time felt like the beginning of a new chapter and a breath of fresh air for thousands of photographers watching the space. What nobody knew at the time was that August would mark the peak of the market.

Photography becoming its own category within crypto

With its record sales (not only for NFTs, but also for traditional photography), photography was quickly capturing the mainstream attention. Christie’s which had led the $69 million sale of Beeple’s Everydays in March 2021 was now taking photography to the auction. Twin Flames which had yielded $13 million of volume and sold for as high as $1.9 million (506 ETH) was the obvious choice.

Twin Flames #83 Bahareh & Farzaneh which was auctioned off in October 2021 alongside works by Ansel Adams, Diane Arbus, Hiroshi Sugimoto, and other legendary photographers fetched $1.1 million.

Despite the catchy headlines, photography was still tiny compared to the rest of art on the blockchain. Photography as a category had done 15,000 ETH ($45 million) of volume through the end of October which was less than one third of what a single Art Blocks collection Fidenza had done. Photography was still niche and lost in the sea of all crypto art, largely misunderstood, and perceived as too illiquid and therefore risky by many collectors.

Justin and three other creators (Kris Graves, Alexx Shadow, and Jonas Lamis) saw an opportunity to help photography stand on its own. In November, they launched Quantum Art, an NFT platform focused entirely on photography. Their inaugural collections (Anxious Pleasures, Rizzo Collection, and Privileged Mediocrity) sold out in minutes. Inspired by Art Blocks, the post-mint reveal of photographs was magical, encouraged lively conversations among collectors, and created a vibrant secondary market where people traded their pieces for the ones they wanted the most.

By the end of December, Quantum had launched 11 collections, onboarded over 500 collectors into photography, and created one of the strongest communities. January through March was the strongest season for Quantum. Floors for the genesis Season 1 collections were rising 5X-10X. Season 2 drops were selling out in less than 5 minutes for 1 ETH ($3,000) a piece. Quantum was responsible for over 30% of total photography sales driving attention to the whole photography space.

Following two successful seasons, Quantum would go on to expand its ambitions beyond photography and enter generative art, launch a physical gallery and artist space in Santa Monica, and introduce a platform with tools for any creator to mint their NFTs.

Entrepreneurship and innovation in photography

The rise of photography and innovations in the space fueled creators with energy to experiment and push the boundaries of their art and ambitions.

• The Metascapes was the first photography collaboration formed between landscape photographers Cath Simard, Ryan Newburn, and Iurie Belegurschi and artificial intelligence, aiming to bridge the gap between reality and the metaverse. The three artists uploaded their entire life’s work to create a collection of 2,500 hyper realistic landscapes.

• Dream Lab created the first of its kind generative photography project that harnessed the serendipity of on-chain mechanics to produce 1,111 unique images based on Jacob Riglin’s photograph of Raktozbrucke Bridge in Germany and shaped by over 1 million photographs he had taken over his lifetime.

Some of the most supportive communities sprang out of photography projects.

• Collective Strangers started by photographer Eric Rubens and entrepreneur Noah has made it easy for 900 people to learn the fundamentals of photography and collaborate on creative projects.

• Big Hugs Studio founded by artist Christopher David Ryan and entrepreneur Jeff Excell has brought together 1,200 people excited to write stories, create characters, and spearhead artistic projects.

Photography is a very supportive community in crypto. Artists are sharing best practices and uplifting each other. Nearly everyone who’s ever sold an NFT has collected an artwork from their peers. The top-20 photographers have collectively spent over $1 million of their hard-earned income buying their fellow artists’ work.

Photographers and collectors who found success have been actively paying it forward educating artists on web3 and helping them launch their first collections.

• Transient Labs is a creative studio that works with artists on the most groundbreaking projects pushing the boundaries of smart contracts. It was started by photographer Ben Strauss and software engineer Marco Peyfuss, and has enabled such coveted collections as Dave Krugman’s Drip Drop, Jeremy Cowart’s Block Queens, and Michelle Viljoen’s Hidden Stories.

• Assembly, launched by photographer Shane Lavalette and curator Ashlyn Davis Burns, was the first curated photography platform to onboard fine art photographers into web3. Their debut series The 50 Carpoolers by Alejandro Cartagena became one of the top-10 grossing collections of all time.

• Light Art, founded by collector & entrepreneur Marcos Siqueira and travel photographer Elia Locardi, is a launchpad for biggest artist collaborations. Their debut Alpha collection which included 200 works from 100 artists, many of whom were new to web3, sold out in 10 hours. The team will soon be releasing their first curated collection.

• Allships is Dave Krugman’s studio that forges relationships between brands and the leading creatives. It’s also the biggest library of interviews and podcasts with photographers and collectors in crypto diving into artist stories and sharing best practices.

• Monolith Gallery was founded by collector, curator, and big advocate for photographers Chikai Ohazama. Through his gallery, Chikai onboards new artists into the space, supports them with partnerships, and forges relationships with collectors.

Engaging collectors through creative web3-native experiences

Photographers in crypto are some of the most daring and entrepreneurial creators. The best ones are tapping into the most recent innovations to create new and engaging experiences, and form communities around their work.

Editions have been a fertile ground for innovative experiments and an effective tool for photographers to expand and strengthen their communities of collectors and patrons. Editions are multiple copies of the same photograph, typically priced at a discount to 1/1 photographs or collection pieces by the same artist. For top photographers like Michael Sidofsky, Cath Simard, Reuben Wu, Guido Di Salle, and those whose 1/1 work goes for five or even six figures, editions are effective ways to welcome more people into their families of collectors, making their artwork more affordable, but without diluting the overall supply.

Before Cath Simard launched her editions, she had asked her community to pick the artwork they loved the most. This spurred engaging conversations leading up to the drop. Eric Rubens’ editions served as mint passes for his subsequent creative endeavors, including the launch of Collective Strangers. Guido offered the community to mint for free the editions of his “Sicilian Kiss” photograph. Almost 15,000 editions were minted, but the best part was yet to come. Since the mint, Guido offered several opportunities to convert “Sicilian Kiss” editions into more limited series engaging his community in vibrant discussions, sharing stories behind his art, and in the process driving demand and increasing value of what was offered for free just a few months ago.

The demand for editions was steadily rising since December 2021. By the end of March, top-5 editions did over 500 ETH of volume and were trading at 5X-10X their mint value as the mania spread to all parts of the NFT ecosystem. The timing worked well for Drift who launched open editions for 24 hours on April 9 to commemorate one year since his release from jail. First Day Out was minted 10,351 times and grossed $6.5 million (2,070 ETH).

The power of storytelling in building value and longevity

Following the release of First Day Out, Drift became the #1 grossing photographer in crypto. Over 3,200 ETH in primary sales and 300 ETH in royalties. How did he get there? What made over 10,000 people want to own an editioned piece of his art?

Stories are the most powerful force in photography. Stories spur nostalgia, memories, and thoughts. We find connection in these shared stories, connection that spawns from a place of meaning.

Drift’s story instills courage, resilience, and faith, calls to action, and invites to follow your dreams. Drift’s story is not only a glimpse into the past, but also a philosophy guiding his path forward. He’s one of the most generous people, uplifting others and supporting artists and numerous causes that are dear to him. With “First Day Out,” he raised over $1 million for the bail project in Cincinnati to be used for bail relief in the same facility in which he had been incarcerated.

High-quality artwork and powerful stories are a strong combination, but it doesn’t fully explain why some photographs sell for 100X more than others. Is there more to a photograph than a story? What are collectors really buying?

Guy Bourdin and Gregory Crewdson are some of the most iconic photographers in history. Guy Bourdin was a legendary fashion photographer well-known for his editorials in French Vogue during the 1960s and 1970s. Gregory Crewdson has been renowned for his elaborately devised photographs of life in small towns of the U.S. Their work is highly sought after and fetches as much as $50,000 a piece at the most prestigious auctions around the world. So when Fellowship Studio partnered with their estates to mint their work as NFTs, it is no wonder that collectors were eager to pay the asking price of $5,000-$10,000 (some auctions went as high as $70,000).

Artist reputation is important. However, it doesn’t automatically translate into reputation in web3. There are plenty of photographers who boast enormous reputations in the traditional art world, with collectors waiting several years to buy their work for five digits, but completely lost momentum and even never took off after entering the crypto space.

The opposite is also true: photographers who had a following, but were largely under the radar, absolutely crushed it in web3. Cath Simard, Monaris, Billy Dinh, and several others worked tirelessly 24/7 for over a year to build their reputation, promote their work, and foster relationships; learned the ins and outs of crypto; and have been highly thoughtful about their work. The majority of what others see are headlines such as “sold for 15 ETH” and “set new all time high of 30 ETH.” However, what preceded these incredible results were the countless hours in Discord groups and Twitter Spaces, sharing about their work, getting to know the community, supporting fellow artists, brokering deals, and more. No wonder the most visionary collectors who followed these artists’ journeys are paying $20,000-$50,000 for their work. They saw how much these artists accomplished in one year, and they are betting on them doing even greater things in the decades to come.

Engaging with the community and promoting artwork contribute significantly to the artwork’s value and longevity, but they are not a means to an end. Artists, first and foremost, make art. “To ask an artist to be creating and maintaining a community is limiting their mission as an artist,” posits photographer Alejandro Cartagena. “Artist’s commitment is to build a solid career based on pushing their art and experiments. The more liberty the artist has, the bigger of an artist they will become and the value, artistic, historic, community and monetary will build around their work. The art that was created is the community.”

Flight to quality

As the market began to cool off in April, collectors started looking for ways to preserve their capital. Many gravitated toward the most premium and exclusive artwork that they thought would stand the test of time. This was true across all categories within NFTs, including photography.

While recent sale prices across the top-100 collections are down 20%-90% since the peak in April, nearly half of them have held their value when compared to their mint prices. Besides Justin’s Twin Flames and Drift’s Where My Vans Go, collections by such OGs as Alejandro Cartagena, Ben Zank, Billy Dinh, Brendan North, Brooke DiDonato, Chris Hytha, Dave Krugman, Kristopher Shinn, Michelle Viljoen, Mike Szpot, Monaris, and several others are still 2X-10X above the mint price which, even at a lower ETH price, has translated into over $15 million (12,000 ETH) of net gains for original collectors.

It’s a similar story with premium 1/1 photography. Sales by the top-50 photographers on SuperRare in the last three months reached the peak levels last seen in January. Sales in July-September exceeded 850 ETH ($1.2 million). Of these top-50 artists, 21 set their new all-time highs. On average, recent ATH are 4X higher than these artists’ first sales in 2021.

Counting Fellowship Studio, photography on SuperRare during July – September had the strongest period ever. Led by Alejandro Cartagena, Chadwick Tyler, Fernando Gallegos, and Studio137, Fellowship is the most successful gallery on SuperRare. It grossed 1,500 ETH ($2 million) in July – September, which is equivalent to 65% of total photography sales on SuperRare during those three months.

Since its founding, Fellowship onboarded into crypto ten legendary artists who are some of the most significant photographers in the medium’s history. Releasing their work as NFTs marked the beginning of a new age for collectors seeking truly rare grails.

Fellowship’s approach strongly resonated with the leading collectors as the released artwork was scooped up in just a few hours despite the five-digit price tags. Three images from the archive of fashion photographer Guy Bourdin set new records fetching 25-50 ETH ($35,000-$70,000) a piece. The whole series of 99 works grossed over 620 ETH (almost $1 million) – the most of any photography collections ever released on the blockchain.

Strong start, but still a long way to go

Since the beginning of 2021, over 1,000 photographers joined web3 minting their work on the blockchain and grossing over $50 million. This is a remarkable result for the industry that didn’t even exist two years ago.

However, behind the catchy numbers is the hard reality:

• Earnings concentrated at the top: 100 photographers = 77% of sales

• Only 60 photographers grossed over $100,000 in 2 years

• Female artists = only 15% of sales

With the market slowdown, the situation is even more dire: while the top-10 photographers each grossed, on average, $150,000 in the last 3 months, the next 40 earned less than $15,000.

It is inspiring as it is to see the leading artists find new home for their work during these difficult times. However, we have a long way to go to fulfill the original vision – empower as many artists as possible to earn a living by doing what they love doing the most, i.e. making great art.

Web3 has seen an enormous amount of innovation over the last two years. It is easier and more affordable than ever to mint artwork on the blockchain. Manifold and Transient Labs provide effective tools to spin up a custom smart contract and launch the most unique collections, while Foundation and (soon) Quantum Studio help artists create work and list it on their marketplace.

The space that has seen little innovation and that is ripe for improvement is the collectors’ experience. Today, there is no place to get a comprehensive overview of each art category: browse artists, see their work, track their prices, learn about their exhibitions, study their collectors, etc. These problems are even more prevalent in photography. Based on my surveys, over 80% of collectors have heard of no more than three photographers who usually happen to be in the top-5.

Moreover, the space isn’t safe for collectors from outside of crypto. Verification on NFT marketplaces or Twitter doesn’t instill much confidence, while infinite spam and scam accounts make it a dangerous place to invest substantial sums of money.

Collectors such as AlphaTrilogy, Studio137, GuyNorcal, Anonymoux, Jacqueline Scripps, Matt, Jean-Michel Pailhon, Punk 2070, and several others have contributed enormously to the space, collecting from over 200 photographers and collectively spending over $6 million. Punk6529 and batsoupyum have spent over $3 million curating the largest photography collection which they display in 6529 Museum. Justin Aversano, who has spent over $1 million of his hard-earned income, is an amazing example of an artist who is playing the infinite game, elevating his fellow photographers and expanding the space. Chikai, Rainbow, and 33 are not only collecting, but also actively curating exhibitions and galleries, sharing artist stories and educating about photography.

The early photography patrons and leading collectors have done a lot to stand up, expand, and shape photography on the blockchain. However, to create a truly global digital art market that is fair and equitable and 100X larger than today, we need to make it attractive, engaging, and safe for millions of those who are not yet in crypto to enter the space. Anybody can make a difference by educating their friends and colleagues about web3 and the new generation of art, sharing about artists you admire, taking them to exhibits (IRL and online), helping them buy their first artwork on the blockchain, and more.

The majority of people in web3 are motivated by short-term profits. There is nothing wrong with it. However, as the current market is demonstrating to us, the desire for instant gratification does more harm than good. In traditional photography, hundreds of artists see their work go up in value 2X, 5X, and even 10X over the course of 10-20 years. I believe that photography on the blockchain will follow in the same footsteps.

What’s driving such strong results in the midst of the bear market?

Who are the artists propelling the space forward?

What’s next for photography?

With my analysis, I’ll take a crack at answering these questions.

Premium 1/1 market is the strongest it’s been since the peak in January.

Trailing 3-month sales for the top-50 independent photographers (excluding Fellowship Studio; more on this down below) exceeded 800 ETH as of the end of September.

Of the top-50 artists, 32 had at least one sale on SuperRare in the last 3 months, and 21 set their new all-time highs.

On average, the most recent all-time highs are 4X higher than these artists’ first sales.

Guido and Ben Zank have seen prices for their work rise ~20X in less than a year. Monaris and JM Miller are having the strongest momentum having seen the prices for their work increase by 5 ETH in the last 6 months. Ben Zank’s rise to stardom has been unprecedented – from 1 ETH sale in May to the all-time high of 17.259E in September.

Despite the strong market, 95%+ of artists are barely making a living.

Since February 2021, photographers on SuperRare grossed over $15 million. This is a remarkable result for the industry, but there are still fewer than 100 photographers on the platform.

We have a long way to go to empower thousands of photographers to make a living in the crypto space. Although the last 3 months have been strong for the photography category, such life-changing earnings aren’t available to the majority of artists. Ten of the top-50 photographers accounted for 72% of total volumes. While the top-10 photographers grossed, on average, 53 ETH over the last 3 months, others earned less than 7 ETH.

This is an important reminder that we have a long way to go to fulfill the original vision – empower as many artists as possible to earn a living by doing what they love doing the most, i.e. making great art.

Photography sales are driven by the top-5% of collectors.

Just as photography sales are concentrated among the small number of artists, collecting too is largely driven by the few people. AlphaTrilogy, Studio137, and GuyNorcal have collected over 150 photographs on SuperRare. Jean-Michel Pailhon, batsoupyum, and Matt have spent over $1 million collecting from over 20 photographers on SuperRare.

In the last 3 months, OG collectors like Anonymoux have been getting into photography, collecting largely from the most established artists like Billy Dinh and Monaris, slowly expanding their galleries, and gradually warming up to artists that are earlier in their web3 journey.

There are several well-known collectors who collected from one photographer. Pranksy (collected 7 Rizacan Kumas’ works), Cozomo de’ Medici (4 Michael Sidofsky), fastackl (2 Caitlin Cronenberg), Bharat Krymo (1 Ryan Koopmans), Vince (1 Jacob Riglin), Vincent Van Dough (1 Guido), and a few others have made their first purchases, but again gravitating mostly toward the top-20 photographers.

Decreasing barriers to collecting premium artwork.

SuperRare had long been associated with highly curated premium artwork that was largely affordable to the top-5% of collectors. While such tight-knit approach was important in the early years to build reputation and earn trust, it had to evolve to fulfill the original vision of a truly global digital art market open to everyone.

One such evolution was the launch of series custom contracts last year. The inaugural Lux Noctis Series was launched in November 2021 by one of the greatest photographers of our generation Reuben Wu.

Since then, dozens of artists launched series on SuperRare, making their premium work more available and, oftentimes, more affordable, and expanding their families of collectors.

Kristopher Shinn is a great example of someone who capitalized on this opportunity. His 16-piece series “Come Together” released in September grossed 21 ETH in less than one month compared to the eight 1/1 pieces that had taken him over 6 months to sell, but which had earned half as much. With the starting price of 1 ETH, some pieces from the “Come Together” series fetched as much as 3 ETH, setting new records for Kristopher and onboarded 15 new collectors into his family.

Decentralizing curation to identify and foster strong artistic talent.

When SuperRare launched in 2018, digital art sales were less than $1 million. The team took a thoughtful, measured approach to growth and gradually built a reputation for quality curation and authenticity.

As SuperRare grew into the premier NFT art platform, it became clear that growing and thriving at web scale and fulfilling the vision of a truly global multi-billion dollar decentralized art market required a different approach.

In August 2021, SuperRare took the first step toward fulfilling the vision of a global decentralized art market. The launch of RARE curation token and SuperRare DAO kickstarted the shift of ownership, curation, value capture, and governance over the SuperRare network to the community.

One of the most impactful outcomes of this strategic shift was the launch of SuperRare Spaces – independently run galleries that curate, promote and sell artwork.

A year later, there are 20 Spaces on SuperRare which together have grossed over 2,200 ETH. The result is even more impressive when you learn that one such Space accounted for two thirds of this volume.

Fellowship Studio grossed 1,500 ETH in July – September. This is equivalent to 65% of total photography sales on SuperRare during those three months.

Started by the artists Alejandro Cartagena, Chadwick Tyler, and Fernando Gallegos, as well as the collector Studio137, Fellowship Studio went after the most iconic photographers in history. Gregory Crewdson. Joel Meyerowitz. Joel Sternfeld. Since July, Fellowship onboarded into crypto ten legendary artists who are some of the most significant photographers in the medium’s history. Releasing their work as NFTs marked the beginning of a new age for collectors seeking truly rare grails.

Three images from the archive of fashion photographer Guy Bourdin set new records fetching 25-50 ETH a piece. (This was still a bargain compared to the six digits that Bourdin’s work tend to sell for at auctions.) Ninety nine pieces that were released grossed over 620 ETH – the most of any photography collections ever released on the blockchain.

Onboarding such legendary artists is a huge win for the web3 space. These photographers have long waiting lists for their work and almost never associate with emerging brands like Fellowship. However, the team’s experience and thoughtful, measured, and highly strategic approach are clearly resonating with them.

Forging a path toward a truly global decentralized art market.

For photography to grow 100X, empowering thousands of photographers to earn a living, there needs to be a more effective way to not only onboard more artists, but also discover their work, highlight and promote it.

Launching SuperRare Spaces was an important first step toward decentralizing curation. Reassured by the success of Spaces, the team spearheaded the next evolution of the platform.

In August 2022, SuperRare proposed curator lists, with the idea to allow anyone – collector or not – to identify and foster strong artistic talent and shape the future of digital art.

This is a grand idea that has the potential to create a truly global and connected multi-billion dollar digital art market. The rise of open curator platforms like Deca and JPG, with thousands of people creating galleries, curating exhibits, and sharing about the art they love, is encouraging. With the right incentives and rewards system, with the DAO established, and with the RARE token in circulation, SuperRare seems to be well-positioned to lead the digital art revolution.

A rising tide lifts all boats. As the digital art market expands, photography will expand with it. Still less than 5% of all sales on SuperRare, photography has a strong potential to become a significantly bigger category. My hope is that we use the strong foundation we have built in the last 2 years to create a market that is not only bigger, but also more fair and equitable.