Sotheby’s has become the first major auction house to introduce cryptocurrencies as a payment method for physical artworks, following its prior sales with digital NFT art last month.
“Love is in the Air” (2003), one of street artist Banksy’s most recognizable works, is the first piece that Sotheby’s will make eligible for purchase via either Bitcoin or Ether. It’s estimated to sell for $3 million to $5 million (between 35 and 53 Bitcoin) when it goes up for auction May 12 in New York.
Though Sotheby’s will stick to conventional bids in USD, the winning buyer will have the option to pay the hammer price using cryptocurrency (crypto will not be accepted for the buyer’s premium and overhead premium, according to an email statement from the auction house). The acceptance of Bitcoin and Ether as legitimate remittance comes as part of a collaboration between the auction house and Coinbase – one of the world’s largest cryptocurrency exchange platforms.
The art world has been experiencing a shift lately, as some digital artworks in the form of Non-Fungible Tokens (or NFTs) have sold for jaw-dropping prices. NFTs use a digital ledger to certify the work is original and authentic, and – like cryptocurrency – rely on blockchain technology. But with the average price of NFTs declining, some have speculated the bubble is already bursting.
Sotheby’s introduced its NFT-only sale, “The Fungible” collection, last month. The auction house said in a press release that its decision to now recognize cryptocurrencies as a payment method is a “market-defining” arrangement and a “continuation of Sotheby’s experimentation with new technologies.”
While there’s no doubt a movement is building – independent art gallery Dadiani Fine Art in London began testing cryptocurrency payment solutions in 2017, and in March, Elon Musk tweeted you could now buy a Tesla with Bitcoin – crypto-accepting vendors are still the niche rather than the norm.
Critics have also warned that the validation process necessary for these digital transactions is detrimental to the environment, requiring high levels of electricity. One study found that Bitcoin produces 22 megatons of CO2 emissions each year – a carbon footprint that rivals the output of Las Vegas.
Yet despite its ecological impact, the bank-free distribution network of crypto gives the digital currencies a somewhat utopian appeal. Sanchan Saxena, Coinbase’s VP of product, said that Sotheby’s was “evolving with their client base to cater to crypto-forward consumers.”
Banksy’s own body of work speaks to a desire to upend the status quo. The anonymous street artist has made a name for himself by orchestrating high-profile stunts in the art world that provide an element of social commentary – including shredding his own artwork after it sold for $1.4 million at Sotheby’s London in 2018.
In a press statement, Sotheby’s said it hopes that by launching its adoption of cryptocurrency with “Love is in the Air,” they honor Banksy’s legacy by uniting “the biggest disruptor in finance with one of the most notable disruptors in the art world.”