Sotheby’s is selling 37 works of digital art once owned by the defunct Singapore cryptocurrency hedge fund Three Arrows Capital in a live auction next week in New York.
“Grails,” as the collection is titled, includes several works of digital art created by pioneering generative artists, including Dmitri Cherniak, Tyler Hobbs, and Larva Labs—creators of Cryptopunks. As the title implies, these are sought-after works in the history of generative art, which refers to digital art created from computer algorithms and minted on blockchain as nonfungible tokens, or NFTs.
The live auction at 4 p.m. on June 15 is expected to realize about US$5 million, which would be in addition to a little more than US$6 million already achieved from the collection via auctions and private sales, Sotheby’s said.
Three Arrows Capital, which was based in the British Virgin Islands, filed for bankruptcy in July under Chapter 15 of the U.S. bankruptcy code, which is for cases that involve more than one country. The former hedge fund’s assets—including the NFTs—are now being liquidated, with proceeds from sales returned to creditors, according to Teneo (BVI), which is handling the liquidation.
Perhaps fortunate for the firm’s creditors, collectors are still snapping up digital art even if the category as whole is not making the same kind of headlines it once did. In fact, many collectors who were aware that these works were coming to market are jumping at the chance to participate, according to Michael Bouhanna, Sotheby’s head of digital art and NFTs.
On May 19, Sotheby’s sold seven works from the Grails collection during its day auction of contemporary art for a total of US$2.5 million, all of which achieved results above the top end of estimate ranges.
Among the sales was Hobbs’ Fidenza #725, 2021, which realized US$1.02 million, above a US$180,000 high estimate, and Larva Labs’ Autoglyph #187, which sold for US$571,500, also above a US$180,000 high estimate. The final prices include fees, while the estimates do not.
Sotheby’s also brokered private sales from the collection totaling US$3 million, including Larva Labs’ CryptoPunk #6649, which it described as a “rare alien Punk,” and Autoglyph #358.
“What we’ve seen from this first kickoff of the Grails series is that there is a lot of interest when it comes to quality, especially around generative art, and long-form generative art,” Bouhanna says.
The Grails collection includes several works of long-form generative art, which refers to projects that can include hundreds or thousands of unique iterations of digital art created by an algorithmic script. As Hobbs describes it in an essay on his website, when a collector buys a new iteration of a project, “the script is run to generate a new output, and that output is wrapped in an NFT and transferred directly to the collector.”
The collection coming to market on June 15 has several landmark long-form works including Cherniak’s Ringers #879 (the Goose), 2021, which is one of 1,000 iterations. The winning bidder will receive the Ethereum-based NFT and a signed and titled print. The estimate on the work, which is guaranteed to sell by a third party, is between US$2 million and US$3 million.
Another is Snowfro’s Chromie Squiggle #9071, 2021, one of 10,000 iterations, and the first project executed on Art Blocks, which created a platform that enabled long-form generative projects, Bouhanna says. Florida-based Art Blocks says the “Squiggle” was a passion project of Erick Calderon, the company’s founder and CEO.
The interactive animation is estimated to sell for between US$8,000 and US$12,000, but already has a US$14,000 bid, according to Sotheby’s website.
Also up for sale is Autoglyph #218, with an estimate range between US$110,000 and US$180,000 (and a current bid of US$100,000). The auction also includes five more works from Austin-based artist Hobbs’ Fidenza series, including #216, which Sotheby’s describes as a “quintessential example of how the randomized process of generative art can produce results that are perfectly balanced.” The work is expected to achieve as much as US$180,00 and now has a bid of US$110,000.
It’s been a year-and-a-half since the market for NFTs has reset after an initial flurry of interest and crazy prices. Today’s market is “way more organic and healthy,” and “less speculative,” Bouhanna says.
A broader range of collectors are attracted particularly to generative art, including traditional clients, some of whom had collected initial works of computer-created art created in the 1960s. In its online catalog, Sotheby’s describes three public exhibitions of graphic art in 1965 that featured works by several artists that were generated by a computer algorithm.
There is “ this duality between the artist and the machine that is very interesting,” Bouhanna says. Over decades artists have adapted to technological innovations with the tools at hand. “The most prominent one we’ve seen is the blockchain—it unlocks a lot of possibilities for the artist and that’s why we see a very strong revival of this movement,” he says.
The auction may not be coming at an ideal time for crypto-wealthy collectors whose fortunes could see an impact from the SEC’s lawsuit against Binance, the world’s largest cryptocurrency exchange. Prices for Bitcoin and Ether were rebounding on Tuesday after a slide on Monday, however. The Sotheby’s sale gives winning bidders the option of using cryptocurrency.
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