An exceptional digital art collection previously owned by the collapsed cryptocurrency hedge fund Three Arrows Capital has fetched nearly $11 million at Sotheby’s in New York. This groundbreaking auction has set a new record for the sale of non-fungible tokens (NFTs), despite a recent downturn in demand for these unique assets.
The collection consisted of 37 artworks, available for purchase using cryptocurrency. One notable piece, Dmitri Cherniak’s “Ringers #879,” also known as “The Goose,” was sold for $6.2 million to a passionate collector known as @punk6529. Sotheby’s announced that this sale positioned the artwork as the second most valuable piece of generative art ever sold, with another work by Cherniak taking the top spot.
This auction comes shortly after Sotheby’s successfully sold a smaller batch of NFTs from Three Arrows, fetching $2.5 million. Three Arrows, now bankrupt after facing claims from crypto exchange Deribit for failing to repay $80 million, owes over $3 billion to its creditors.
During the peak of the crypto bull market in November 2021, Three Arrows had risen to prominence by borrowing significant sums of money to make substantial bets on digital currency. However, the fund eventually suffered from the sector’s subsequent collapse in the summer of 2022.
While some of the NFTs owned by Three Arrows were sold privately in recent weeks, the total amount raised by Sotheby’s for the collection now stands at nearly $17 million, including fees. The live auction on Thursday attracted almost 1,000 bids from 17 different countries. Notably, over half of the participants were under the age of 40.
The enthusiastic response from collectors contrasts with the broader market’s decline in demand for NFTs. January 2022 saw monthly sales volume reach over $16 billion, according to data from Chainalysis. However, this figure dropped significantly last month, with total sales amounting to a mere $867 million.
Michael Bouhanna, Sotheby’s head of digital art and NFTs, acknowledged the drastic changes in the market’s prices over the past year and a half. However, he emphasized the significance of generative art, which utilizes algorithms and has a connection to computer art from the 1960s. Bouhanna noted that discerning contemporary collectors were recognizing its value.
Bouhanna further added that the NFT space encompasses diverse categories beyond the term’s current description. He believes that “NFT doesn’t really describe it all very well.”
@punk6529, the buyer of “The Goose,” expressed their admiration for on-chain long form generative art as an act of faith by both the artist and the minter. They highlighted the unpredictability of the artwork’s outputs once the algorithm is committed to the blockchain. @punk6529 sees “The Goose” as a true representation of this concept and believes that its journey has just begun.
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