The NFT market cools down, top auction houses explore Crypto Assets.

With Bitcoin continuously reaching new highs, Ethereum is also approaching its peak from 2021, and those in the art world who once had high hopes for Crypto Assets are stirring again. The new president of the United States has shown strong support for decentralized digital assets, which has further fueled the rise of Crypto Assets.

In this context, a well-known auction house will hold its first physical auction accepting ETH or BTC payments next month in Saudi Arabia. This is the first time a traditional auction house has supported Crypto Assets payments in a live auction. The auction house stated that this transformation is expected to attract a new group of buyers in regions active in digital art and Crypto Assets. The auction features a total of 119 lots, including contemporary art from the West and Saudi Arabia, luxury goods, and sports memorabilia.

In fact, before the outbreak of the COVID-19 pandemic, the art market struggled to attract people from the tech industry due to cultural differences. The rise of non-fungible token (NFT) has indeed brought a new wave of wealthy Crypto Assets individuals. NFT is a unique digital asset that connects art with blockchain, commonly used for creating geometric abstract paintings and cartoon comics.

In 2021, several top auction houses began accepting Crypto Assets for the purchase of certain physical artworks. Since then, eligible physical works have also started to lean towards a tech-savvy taste. Now, every well-known auction house has established dedicated NFT and digital art platforms that support sellers and buyers using Crypto Assets.

For the art market, practitioners hope that NFTs and their related alternative coins can broaden the channels for new buyers to enter the high-end art field. Some crypto entrepreneurs have successfully made the transition from digital art to traditional art, investing substantial funds in the process.

However, not everyone views the impact of Crypto Assets on the art market optimistically. There are opinions that the image of encryption primarily targeting young buyers is inconsistent with the lack of diversity in the art auction market itself. Furthermore, the art market has long been cautious towards newcomers, and this industry is largely characterized by conservatism and closed-off nature.

A deeper concern is that Crypto Assets may be used for money laundering. The art market is already prone to being used to convert unstable book profits into transferable tangible assets, and encrypted NFTs are even more likely to become a new channel for money laundering. Several countries and regions have already implemented stricter anti-money laundering regulations regarding services related to Crypto Assets.

The compliance team of the auction house takes a cautious stance on Crypto Assets. Apart from dedicated NFT platforms, only a few auction items meet the conditions for encryption payments. Nevertheless, as the market warms up, the NFT market is also expected to see a turnaround. According to the latest survey, 12% of experts are optimistic about the performance of NFTs this year, although this is far below the highs of 2023, it is already double that of 2024.

A certain auction house stated that the average age of its NFT buyers is 42, significantly lower than the 54 years for other auctions. This aligns with the auction house's strategic positioning to attract a younger generation. The newly appointed CEO of the auction house emphasized that in the future, they will "focus on innovation while protecting cultural heritage, attracting new audiences, regions, and technologies."

In fact, the art market has remained sluggish over the past two years and is in urgent need of new vitality. Data shows that the total auction volume of several major auction houses fell by 26% in 2024 and 19% in 2023. In this context, any opportunity that could bring growth is worth paying attention to. Therefore, as the Crypto Assets market heats up again, struggling auction houses have no choice but to prepare for joining this new wave of excitement.