In It for the Money: Over 80% of NFT art buyers are driven by ROI

Most NFT art buyers get what they pay for.

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Most buyers of non-fungible art-based tokens, unique digital assets better known as NFTs, are for the money, not the art itself, according to a survey.

About 82% of NFT buyers surveyed said they were motivated by investment goals, according to the Hiscox Online Art Trade report released on Tuesday. Of those who purchased NFTs worth at least $25,000 in the past 12 months, 95% cited return on investment as the primary reason for their purchase.

The survey was carried out in January by ArtTactic, a London-based global art market research firm, on behalf of Hiscox Group, a global specialist insurer. The results are based on responses from 595 art buyers worldwide.

There is a significant gender gap in why collectors buy NFTs. While 96% of male shoppers made their purchases for investment reasons, only 67% of female shoppers are motivated by potential returns, according to the report.

The world of NFTs “is still a speculative market, so we can expect a lot more ups and downs,” said Robert Read, art lead and private client at Hiscox Group, in a press release on Tuesday. .

However, the mainstream art market is likely to continue to embrace NFT art, with major auction houses, galleries, art fairs and blue-chip artists offering to expand their customer base, according to The report.

In 2021, Christie’s, Sotheby’s and Phillips sold US$185 million worth of NFT through public auction, including Christie’s US$69 million sale of Mike Winkelmann’s (aka Beeple’s) Every day: the first 5,000 days—having sold none in 2020, according to the report.

Outside of NFTs, the overall online art market has continued to mature and “no longer clings to the heels of the art establishment, but is now an integral part of it,” Read said.

Nearly two-thirds of art buyers surveyed have purchased art or collectibles online in the past 12 months. Among those who had previously purchased art online, more than eight in 10 purchased works online last year, according to the report.

Fine art remains the top category for online sales over the past 12 months, but decorative arts and jewelry have seen the biggest increases. According to the survey, 56% of art buyers purchased decorative art and design online in 2021, up from 48% the previous year. Meanwhile, 26% of respondents said they bought jewelry online in the past 12 months, up from 15% in 2020.

Buyers are increasingly confident in their online purchases, especially young collectors, more than three in 10 of whom purchased their first work of art online, up from 14% in 2020. Additionally, nearly half (47%) of new art buyers—those who started having purchased art in the last three years—made their first art purchase online, up from 30% in 2020.

“The online art market has become a gateway into the art world for new art buyers, many of whom have never ventured into a gallery or auction house,” indicates the report.

Based on the growth rate recorded over the past two years, Hiscox forecast online art sales to reach US$13.5 billion in 2021, a 72% increase in market size. in 2020.

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