While the media proclaim the death of NFTs, major museums are embracing their adoption. Is this a contrarian move or are we witnessing the institutionalization of a new expressive art form?
In recent months, the Non-Fungible Tokens (NFT) sector has experienced a decline in sales and prices, following the Ftx, Luna, Celsius scandals, and substantial losses in Bitcoin and Ethereum after the peak in November 2021.
The trading volume on the Opensea marketplace plummeted by 90% between 2021 and 2022, causing the market value to drop from around $3 billion to just $350 million within a year. Specifically, focusing on NFT art sales, after incredible growth in both value and volume (rising from $605,000 in 2019 to $2.9 billion in 2021), a significant reduction was observed in 2022, with sales reaching just under $1.5 billion. According to the Art Market Report 2023 by Art Basel and UBS, the value decreased by 49% year over year, but this didn’t impact sales, which were over 70 times greater than those in 2020.
With the cooling of the NFT market, the hype that characterized 2021 quickly dissolved. The initial media frenzy gave way to first fear of failure and then precipitous pessimism. Until 2021, when Beeple’s artwork “Everydays: the first 5000 days” was auctioned by Christie’s for $69.3 million, NFTs were hailed as “protagonists of the next chapter in art history.” However, over the last year and a half, a different narrative emerged: “NFTs are dead, useless, just for trading.” In a few years, the celebrated Non-Fungible Tokens, symbols of a significant technological revolution based on blockchain, became the target of numerous controversies, sometimes related to sustainability, other times to legal and financial disputes, rapidly dampening investor enthusiasm.
Amid those declaring the collapse of the NFT world and those persistently presenting data that hints at possibilities beyond the reality, the truth lies in between. Today, the entire Web3 is undergoing social reconsideration and stringent legal regulations. The prevailing sentiment is that the NFT market is entering a new phase of consolidation, moving beyond wild speculations (hampered by a general rise in interest rates). According to the prestigious US magazine Forbes, the initial euphoria has subsided, and the NFT market is now witnessing more targeted and informed investments. The focus is shifting toward the actual benefits of assets, paving the way for future global-scale crypto adoption. NFTs are far from dead; in fact, they are becoming increasingly mainstream.
However, it’s known that mass adoption of new technologies takes time to comprehend their real utility and associated advantages. While professionals in the field understand the benefits of Non-Fungible Tokens, one might wonder how clear these benefits are to individuals unfamiliar with cryptocurrencies. In my view, there’s an urgent need for crypto and Web3 education, but most importantly, the natural integration of NFTs into real-life events, essentially bringing people closer to digital transformation.
NFTs Enter Museum Permanent Collections
Early signs of integration are emerging in the museum sector. Five major museums have chosen to include NFT artworks in their permanent collections, either through donations from collectors or acquisitions.
1. The LACMA (Los Angeles County Museum of Art) received a donation of 22 on-chain artworks (LACMA opted for the term “blockchain art” or “arte on-chain,” distancing itself from the controversies surrounding the term NFT) from crypto collector Cozomo de’ Medici last February. The collection comprises works from 13 international artists, almost half of whom are women, depicting the history of the Crypto Art movement. Besides the crypto collector’s donation, the museum’s board approved the acquisition of another 15 blockchain artworks, totaling 37 NFTs.
2. The Centre Pompidou acquired a series of 18 NFTs by 13 prominent French and international artists, which will become part of France’s national collection of modern and contemporary art. Artists include Fred Forest, Larva Labs, Jill Magid, Robness, and John F. Simon Jr. The acquisition was jointly initiated by the French Ministry of Culture and the Pompidou’s director, Xavier Rey, who stated,
“Web3 is an innovative realm that artists have now exploited to create original and bold works, and this collection underscores our support for artists in their quest for new means of expression, which is the foundation of modern art.”
3. In 2021, the Institute of Contemporary Art in Miami received CryptoPunk 5293 as a donation from Eduardo Burillo, a member of the ICA Miami Trustee, who deemed CryptoPunks as representations of innovation in art, identity, and cultural archives.
4. The San Francisco MoMA acquired its first NFT, “Final Transformation #2” by artist Lynn Hershman Leeson. The artwork is a clip from Leeson’s 1997 film “Conceiving Ada,” featuring actress Tilda Swinton in the role of mathematician Ada Lovelace, the first computer programmer in the 19th century.
5. The Museum of Modern Art in New York announced its intention to invest part of the proceeds from art auctions into purchasing NFT artworks. Simultaneously, its curatorial team led by Michelle Kuo and Paola Antonelli initiated events aimed at educating about the crypto world, along with hosting large exhibitions. Notably, the recent exhibition “Unsupervised” featured artist Refik Anadol, who condensed and reinterpreted MoMA’s entire collection spanning 200 years of art history.
These initiatives are just a few examples of efforts by major global museums to preserve and promote Blockchain Art. Simultaneously, research and experimentation in this field are rapidly advancing in new museums created solely to accommodate digital art. The generous donation by crypto collector Cozomo de’ Medici aligns with a renewed perception of on-chain art, foreshadowing the phenomenon of its institutionalization, which will likely grow rapidly in the coming years. Museums‘ approach toward it must aim to create a real impact on our culture and authentically narrate the story of contemporary society.
Future Challenges for Museums
Blockchain has significantly impacted the digital art ecosystem, both in terms of production and the circulation of artworks. The challenge for museums that have chosen to include on-chain art in their permanent collections is to explore the boldest creative uses of this technology, engaging in a reflection on the crypto ecosystem, ranging from definitions to the boundaries of the artwork, authorship, collection, and audience.
As stated by the Centre Pompidou:
“One of the missions is a constant focus on emerging creation and artistic experimentation. The Musée National d’Art Moderne, with its historical perspective, requires a scientific approach. The goal is to include in the State’s collections artistic achievements that, due to their originality, complexity, and critical quality, can engage with the history of present and future art, beyond the mediated effects of the market.”
This challenge aligns with the new ICOM (International Council of Museums) definition of a museum:
“The museum is a permanent non-profit institution in the service of society, open to the public, which acquires, conserves, researches, communicates, and exhibits the tangible and intangible heritage of humanity and its environment for the purposes of education, study, and enjoyment.”
However, integrating NFTs could pose several challenges for public institutions. Firstly, the exchange value of such cryptocurrencies is potentially highly volatile, and a museum cannot afford the sudden loss of a portion of its investments. Additionally, the issue of purchasing NFTs poses challenges: Museums need a specific cryptocurrency for the blockchain they are transacting on. In the case of LACMA, their NFT acquisition resulted from a generous donation, so they didn’t need to hold cryptocurrencies.
These factors do not diminish the innovative potential of on-chain art but rather serve as a stimulus to seek ever more effective and cutting-edge solutions. While all involved parties need to reach a compromise, satisfying the needs of museum institutions to embrace innovation within manageable budgets and valuing the underlying technology of NFTs, the future developments in the cultural sector remain to be seen, including how many more museums will accept the challenge of engaging with new technologies.
Art Market Report 2023, Art Basel and UBS
Art & Finance Report 2023, Deloitte