In some respects the worlds of contemporary art and cryptocurrency are very much removed from one another. Contemporary art is (and perhaps always will be) concerned with the physical item. It might be a painting, a sculpture, mixed media or perhaps even a shark preserved in a tank of formaldehyde. (see: http://www.damienhirst.com/the-physical-impossibility-of). Whatever the case may be, the art produced is ultimately a real-life tangible thing.
Meanwhile, cryptocurrency is a form of asset that exists exclusively in the digital realm, requiring no certificate of ownership or possession in the conventional sense. It does not manifest as a real-world object and its visible presence is limited to a string of characters on a screen.
Yet beyond their obvious differences, there is one key area in which art and cryptocurrency have a great deal in common. Namely, their ability to act as outlets of high-level speculative financial investment.
This is a well-established trend in the art world at least, so much so that contemporary art is art least partly synonymous with such speculative activity. In 2017 this reached new heights with the record-breaking sale of Leonardo Da Vinci's Salvator Mundi. The price for the painting: a cool $450 million.
A year later, Banksy's Girl With Balloon sold at auction for £1.042 million. Upon the hammer falling a self destruct mechanism built into the frame activated, shredding the work into strips.
Rather than this meaning disaster for the purchaser, the destruction of the painting instead sent its value soaring to around double the sale price. The art market is one ultimately that values intrigue, mystery and originality and it is therefore not unsurprising that such an intervention would bode well for the piece in financial terms. In truth, the value of Banksy's work is not hindered by associations playfulness and trouble-making - instead it is actively informed by it.
It is with this in mind that a comparison can be drawn between art and cryptocurrency. Cryptocurrency continues to be (for the time being at least) an outlier, both from a cultural and economic standpoint. Indeed, the volatility of the cryptocurrency market is widely documented and has been cited in arguing against its potential long-term application. Nevertheless, the recent BTC all-time high has once again piqued the attention of not only crypto enthusiasts but the world at large, bringing coverage from international legacy media as well as online commentators. Indeed, just earlier today ETH followed suit, clocking an all-time best of $1476, proving that the 2017 slump was simply not an accurate representation of market potential. It is precisely this record-breaking, head-turning financial dynamism that holds the potential to draw the gaze of investors who do not currently hold cryptocurrency, once again reiterating the case for new channels of investment.
In fact with increasing numbers of major companies demonstrating a keen interest in diversifying their portfolios to include cryptocurrency (most recently BlackRock, the world's largest asset manager announced plans to purchase Bitcoin) the outlook for the DeFi market looks to be a promising one. Whilst the technical engineering that underpins cryptocurrency is ultimately of paramount important, it is the way that forces beyond the world of technology engage with the market that will prove key long-term. When financial giants such as as Blackrock choose to invest in cryptocurrency it sends a clear message of support to alternative financial technologies to the world at large. This, it must be said, can only be a good thing with regards to increasing cryptocurrency's overall approachability and accessibility on the global stage.
For now the work of artists such as Picasso, DeKoening and Bacon will continue to be a firm choice for many high-level investors. Yet it seems only a matter of time before the potential benefits offered by cryptocurrencies begins to be difficult to ignore. When that happens, it may just be the tipping point that ensures cryptocurrency's move from the margins to front and centre of the financial world.
Sources: http://www.damienhirst.com/the-physical-impossibility-of)
https://www.telegraph.co.uk/cryptocurrency/
https://www.christies.com/features/Leonardo-and-Post-War-results-New-York-8729-3.aspx
https://www.coindesk.com/blackrock-give-two-funds-go-ahead-to-invest-in-bitcoin-futures
https://www.forbes.com/sites/jeffkauflin/2019/04/26/why-everyone-in-crypto-is-talking-about-defi/
This was my first article on Publish0x! If you have any comments then I'd love to hear them. Hope you enjoyed reading :)
