What Drives Collectors? 🤔
A new art market report, and the psychology of digital collecting
Cultured is a newsletter that gets readers up to speed on the most interesting things going on at the intersection of finance, art, collectibles, NFTs, and more. Cultured is produced by Otis, an alternative investment platform that was recently acquired by Public.com.
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🗞 STORIES OF THE DAY
The art market is back and better than ever, according to Art Basel and UBS
Art Basel and UBS released their annual Global Art Market Report this week. It paints a portrait of a strong art market that has rebounded above pre-pandemic levels and continues to grow at a rapid pace.
Last year, the art market turned over $65.1 billion in sales, a 29% increase from the year before and a $700 million increase from pre-pandemic levels. The US continues to lead the pack in terms of sales, followed by China and the UK.
As expected, the NFT market had a banner year, growing from $4.6 million in 2019 to $11.1 billion (that’s billion with a “B”) last year. Most of those sales didn’t happen at major auction houses — Sotheby’s and Christie’s only account for $230 million of that total.
Our Take: The Art Basel/UBS report is a rare global insight into the trading habits of high net worth collectors.
The report surveyed around 2,000 HNW collectors, a surprisingly wide sample. The results are illuminating: while HNW collectors still overwhelmingly prefer to collect from dealers, decentralized art pieces like NFTs are catching on. Just 4% of collectors surveyed said they weren’t interested in buying a token. Moving forward, it’ll be interesting to see if this push toward NFTs changes the relationship with dealers and auction houses.
What motivates digital collectors?
For quite some time, digital collecting has been seen as the logical evolution of physical collecting. New research shows that the psychology that motivates digital collectors is similar to that of material collectors.
Digital collectors are motivated by self-identity, or their conception of their own identities, which affords them access to a group of like-minded people. This isn’t surprising, given that those who collect material items often report similar motivations.
Control is another important motivator for digital collectors. This is also a motivator for standard collectors, but may be more limited for digital collectors because they don’t own a physical object.
Our Take: The psychology behind digital collecting seems to confirm that it’s an evolution of physical collecting practices.
Digital collecting is still a new field, meaning that most studies of the topic are small and limited in scope. Still, early results offer some interesting conclusions. Even though digital objects differ from physical ones (in that they don’t have to exist in the owner’s home or even in the physical world), digital collectors are motivated by the same things as their material counterparts.
✨ AROUND THE INTERNET
Who’s doing NFTs now? Tiffany & Co., G-Star RAW, Jeff Koons, and Bandai Namco (Check out the full list of NFTs by celebs and big brands on Otis Mag).
The New York AG is pushing Sotheby’s to hand over client sales records, a move the auction house has balked at.
Axie Infinity, a large NFT game on the Ronin blockchain, was the victim of a hack earlier this week. Hackers stole $625 million worth of crypto from the platform.
Heritage brought in nearly $2 million from the sale of a massive Americana collection — the latest sign that political memorabilia is one of the industry’s hottest markets.
Samsung has integrated Nifty Gateway, a major NFT marketplace, into its smart TVs.
Weekend read: the complicated history behind a 19th century Indian mural that sold for $830,000 at Sotheby’s.
