Although the value of Bitcoin is speculated to reach an eight-month low this week, sending investors jittering and Discord abound with chatter, it is unlikely the dip will pause the art world’s continuing trajectory to create a booming market for NFT art.

TEXT: Denise Tsui
IMAGES: Courtesy of various

Market Chats gets a facelift to kick off 2022 as we take it beyond the traditional art market. In our monthly column, we will decode the questions we are all asking but not answering.

If there is a topic that you would like Denise to address, drop her a line on Instagram @_littlemissdee_.

In case you haven’t heard, the crypto market has not been having a great start to the year. After 2022 kicked off with market contractions and unpromising forecasts, this week saw Bitcoin plummeting to its lowest value in eight months—to roughly half of its record price, set in November 2021—preceded by a 19% drop last week. And the argument of decentralisation being a key reason for crypto trading to be the future? Well, those dreams are about to be dashed—predictably and rightly needed—as the US, among other major world economies, increases pace on passing policies for the regulation of digital assets.

If the extreme volatility of the crypto market, which has been humorously meme-ified for resembling the shape of Pikachu’s pointy ears by a clever Reddit user, is not enough to send our spines jittering, there’s also what is noticeably a rise in hacks, scams, frauds, theft, and plagiarism. In September last year, Banksy’s website was hacked, resulting in a fraudulent NFT sale; November saw a fake NFT drop from a Discord hack of upcoming game Phantom Galaxies resulting in a compensation of 265 ETH (worth US$1.1 million at the time) to its users by developer Blowfish Studios, a subsidiary of gaming and venture capital company Animoca Brands; while in December, the Tekashi 6ix9ine-backed Trollz NFT collection turned out to be a scam, and Hong Kong project Monkey Kingdom suffered a security breach on Discord where hackers made off with US$1.3 million worth of cryptocurrency. Speaking of primates, there is also the hack that cost New York-based gallerist and art collector Todd Kramer a loss of more than US$2.2 million worth of Bored Ape Yacht Club and Mutant Ape Yacht Club NFTS—15 of them to be precise—in the early hours of 30 December. January saw Animoca Brands being targeted again, under subsidiary Lympo, a sports-focused NFT platform, where a hot wallet security breach led to the loss of 165.2 million LMT tokens (worth US$18.7 million at the time); while more recently, hackers stole 29.67 ETH (about US$95,000 at the time) by orchestrating a fraudulent land drop in CityDAO’s Discord channel. Then there’s the various “rug pulls” whereby developers disappear, taking investors’ money with them. The NFT collection Frosties became the first case of 2022 when it made headlines on 10 January after developers pocketed US$1.3 million worth of crypto funds. If you partake in any NFT Discord or Twitter community then you’ve certainly heard these frequent cautionary news, yet I promise you the above was not a comprehensive list by any means.

The problem however, as I see it, is that none of these red flags and fraudulent cases will deter the art market from continuing to grow its crypto footprint this year, following the financially successful impact it had on the global art market in 2021. Why? Much of the art world is still playing catch-up to the ebb and flow of crypto trading and occupied in our attempts to establish the definition of “art” when it comes to digital assets, not to mention the rising debate that the crypto sphere offers more artists a level playing field. There is still a lot of misconstrued ideas of what “NFT art” entails, and not just because of Wikipedia editors denouncing NFT art as art, or the general misclassification of PFP NFT collectibles as art. The art world at large is also too busy trying to jump on the bandwagon rushing to sprout projects in a bid to outdo each other, and more often than not, taking shortcuts in doing their due diligence homework.

The recent news of ZKM Centre for Art and Media, a forerunner in the art world’s embrace of NFTs and digital art, where the institution admitted to a big blunder of  accidentally “losing” two Cryptopunks, is the kind of instances that heed warning to us all that this is a dangerous and unknown territory where a single misstep can cost millions of dollars. A couple of weeks ago, as an experiment, I dipped my own toes in and bought my first NFT, in part because I began to feel hugely unqualified to keep moaning about NFTs without experiencing everything firsthand. I chose Hong Kong-based PFP NFT project Lucky Kittens, and to my surprise, the complete process—from opening a wallet and buying cryptocurrency to finally owning my kitten—came with a lot of micro setbacks and anxiety-fuelled mini frights. Every step of the way a little wave of panic would send my heart skipping a beat for fear of pressing the wrong button with irreversible repercussions, or being scammed during the peer-to-peer transaction to acquire cryptocurrency. It felt like I was stepping into a topography rich with landmines waiting for the unsuspecting to make one false move. Nothing happened to me—I had friends with extreme patience taking me through the steps though—and I now happily have a new avatar I can say strictly belongs to yours truly. The experience, and the many questions friends and acquaintances have since asked me, certainly leads me to believe how inadept we, commoners of the art world, still are in trying to establish NFTs as a medium in art, and cryptocurrencies as a payment format.

Nevertheless, among London’s British Museum unveiling their second NFT collection—of 20 Turner paintings—thus making it a new revenue source for the institution; Sotheby’s new platform Metaverse; NFT becoming talk of the town at Art Basel Miami Beach; and the myriad of emails filling my inbox everyday announcing the next projects and initiatives (most of which I’m not privy to share yet, but do keep an eye out via our channel (CoBo News), I have confidence it’s all guns blazing, full steam ahead for the art world this year—just a matter of at what cost. It is after all, as The Art Newspaper so rightly points out, a booming but unregulated market, a “Wild West” of finance—and the art market is determined to reap the benefits of that.

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• Hong Kong NFT Project Lucky Kittens Is Having A Miaow-ment Right Now
• Market Chats: What the Art World is Getting Wrong About NFTs