Andy Warhol captured the art market’s commercialism with his colourful silk-screen dollar signs. “Good business is the best art,” he quipped. Were he alive today, bitcoin symbols might be filling his works instead, as a sign of the times. The auction market has recently been embracing crypto with gusto in a bid to bring in younger, more tech-savvy clients.
In an auction of AI-generated art ending on March 5th, Christie’s, the world’s second-largest auction house, will accept crypto on most lots. Sotheby’s, the largest, accepted crypto on all lots for the first time in February during an auction in Saudi Arabia. Crypto-holders are “adding up to a more significant share of the population than four years ago, when it was niche and poorly understood by the mainstream”, says Marcus Fox of Christie’s.
The logic for accepting crypto is simple: auction houses sell art for money, and crypto is money. Buying art at auction can be intimidating for first-time buyers; if paying with crypto helps them feel comfortable, that increases the odds that they will submit a bid and even buy again. As David Galperin, Sotheby’s head of contemporary art, explains, “One of our primary objectives is cultivating new collector bases and bringing new people into the Sotheby’s universe.”
Buyers’ motivation for using crypto to pay may extend beyond ease. In most jurisdictions, when people sell their crypto, they are supposed to pay capital-gains tax on the sale. But if instead of cashing out, they use crypto to buy art, they can try to avoid taxation while diversifying their portfolio (though they risk stiff consequences if caught).
Some may also want to turn dirty crypto into clean assets. Crypto proponents will point out, correctly, that traditional currency can also be laundered. Crypto is supposed to be more traceable because its history is recorded on publicly available blockchains. But services such as crypto mixers, which mingle customers’ crypto together and allow owners to withdraw deposits with obscured sources, exist to evade the blockchain’s supposed transparency. Both Sotheby’s and Christie’s say their compliance checks and due diligence are rigorous for crypto, and neither accepts payments that come from mixers. But one prominent crypto critic notes that blockchain traceability can be altered “in ways that are very challenging to trace”.
The Trump administration’s crypto bullishness means that buying art with crypto will only grow more common. Compliance departments will be busy; auction houses will be richer; and crypto bros will have some lovely new decor.■
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