The Potential For Crypto Art

Key Insights

• Extreme downside volatility is counterintuitively expected in high-end art markets and cannot by itself disqualify art movements from potential success. Even Basquiat prices have seen several large drawdowns at the peak of his fame.
• Sophisticated players are still interested in crypto art for technological advantages from forgery elimination, provenance, instant markets, and self-custody.
• Art markets tend to follow power law distributions, with XCOPY, Videodrome, Tyler Hobbs, Dmitri Cherniak, and Botto looking to be top artists through the bear market.
• Edge in generative art investing can be found by seeing “invisible traits” not easily perceived or explicitly described in project metadata.
• Risks to investing in crypto art include illiquidity, changing preferences, difficult discoverability, and lack of displayability.

Dominant art movements are often a reflection of the times they inhabit. In an age defined by computers, no art is more “computer native” than crypto art.