The Scoop #8 – September 20th, 2022

In our 8th edition of The Scoop, we discuss inflation’s impact on the crypto markets, NFT sales volumes, and spotlight the founder of Art Blocks.

CRYPTO MARKETS

Bitcoin to USD

Ethereum to USD

CRYPTO COMMENTARY

The bumpy road continues for markets across the board as the Fed has indicated that interest rates will remain elevated for the foreseeable future. Markets reacted negatively to Jerome Powell’s comments that the Fed would continue to raise rates as high as needed and keep them there “for some time” to tame inflation, which is running much higher than its 2% target. Traditional equities and cryptocurrencies alike saw increased volatility after the remarks, and more is expected as Fed President John Williams pushed back on the idea that there would be a rate cut next year.   

Source: FRED

Looking at the Fed funds rate level over the last 10 years shows the healthy and natural rate hike cycle begun in 2016 to keep the right balance between growth and potential inflation. As COVID, a black swan event, hit the global economies in an unprecedented way in early 2020, the Fed slashed the interest rates back to near zero (shaded area on the graph). While the short term pain from the pandemic was blunted, this allowed for inflation to grow very quickly unchecked as the economy reopened. It’s worth noting that despite the spate of recent hikes, the Fed funds rate is now at the levels we saw just before the pandemic. Although inflation slowed down a bit in July to an 8.5% increase year-over-year in CPI, we are still at levels not seen in the last four decades. 

The reactions of the market aren’t a surprise, and since many investors are still fleeing risk, the major indexes and tokens could continue their descent. We are still teetering on the edge of a recession, with the next six months being crucial for a “soft” landing.  

WHAT’S THE BUZZ?

In the world of NFTs, what is the single most important piece of security? A seed phrase.  

A SEED PHRASE

  • Every seed phrase consists of 12-24 random words pulled from a list of 2,048. 
  • If access is lost to your wallet or it is deleted, you must have the seed phrase to restore your access. 
  • There is no one to call for help if a seed phrase is misplaced; all of the contents in the wallet are lost.
  • The seed phrase must be kept secure at all costs! 
  • One of the largest phishing scams seen in this space is malicious actors pretending to be from Metamask or Coinbase and asking people to verify their seed phrase. Nobody from any of those companies will ever ask for it.  

NFT BLUE-CHIP COLLECTIONS

Top 5 NFT Collectible Collections

Source: Opensea.io

Top 5 NFT Photography Collections

Source: Opensea.io

NFT COMMENTARY

While the usual suspects are in the top NFT charts, there is nothing usual about the trends that we’ve been seeing in the NFT markets. We’re still seeing the consolidation behind Bored Apes, Cryptopunks, and the Art Blocks collections, which is expected for the blue chips. But the real story is in the number of NFTs being sold and overall cash volumes.  

Source: Dune

Looking at total number of NFTs sold, summer was business as usual. The count of NFTs being sold looks healthy and doesn’t hint at a market downturn. The data points to the number of sales being in its expected range.  

Source: Dune

When we look at the overall monthly volume on the Ethereum network (measured in USD) we’re seeing a summer slowdown with considerably less currency changing hands. We understand it’s a bear market for crypto and that’s a factor, but this leads us to believe it really is a bear market for NFTs as well. People are still buying NFTs but aren’t paying as much. The average price per NFT has dropped considerably. 

The most recent test for the secondary NFT market came from the Sotheby’s MaxStealth Collection sale on Sept. 14. It was the first NFT single-owner live auction, and it opened the door for this concept moving forward. Pieces from XCOPY, Pak and Beeple were included in the 26-lot offering. The timing of the auction was a bit puzzling. With the unease in the global economy and crypto space, it seems that Sotheby’s bet the quality of NFTs on offer would offset the pressure from the larger macro-economic picture. We were able to derive a lot about the health of the high-end NFT market from this sale, especially how valuations are tracking in a bear market. With several pieces withdrawn or unsold it seemed that demand did not meet the Sotheby’s sales expectations – the sale achieved an aggregate sale price of $1.7m against a total pre-sale low auction estimate of $2.9 million. ​Lots above the $100,000 mark seemed to struggle with the exception of the XCOPY piece, while mid-value lots from Beeple, Hackatao/Coldie, and Alessio De Vecchi sold above their respective high estimates.

Departed by XCOPY

NFT ARTIST SPOTLIGHT

Erick “Snowfro” Calderon 

The man, the myth, the legend behind Art Blocks has been a force in the NFT space since he sold his Cryptopunks to fund his new project. Since its inception, Art Blocks has become the epicenter of generative art in the NFT space. From Fidenzas to Ringers, some of the most pivotal collections have found a home under the Art Blocks umbrella. 

Ringers #661 by Dmitri Cherniack

Before Art Blocks, Erick dabbled in painting and other forms of colorful art yet never sought out gallery representation. However, when it comes to generative art, his Chromie Squiggles have become one of the grails in the NFT space since their launch. Working in 3D rendering software called Three.js, Erick adapted one of the sample scripts – a rigid squiggly line consisting of squares – and smoothed the lines out and added movement, rainbows and translucency. Most recently, the Chromie Squiggles popped up on tickets for VeeCon, a conference hosted by Gary Vaynerchuk who is also a Web3 entrepreneur. Rumor has it they’ll soon be on a football jersey somewhere in the EU, bringing further exposure to this new breed of art.   

Chromie Squiggle #4008 by Snowfo

After making a splash in 2021, Art Blocks announced a partnership with Pace Verso in June 2022 bringing two of the most prominent players in Web3 and contemporary art together. This venture will open the doors to new exhibitions and collaborations between the traditional art world and the NFT space. Each has a lot to bring to the table, so we’re looking forward to seeing where this goes.   

NFT & CRYPTO NEWS

READ PAST ISSUES OF THE SCOOP

Disclaimer

Information in this report is compiled from a number of sources; The Fine Art Group does not make any representation or warranty, express or implied, as to its accuracy or completeness. The Fine Art Group shall not be liable for any errors or inaccuracies in this report or for any actions taken in reliance on information or opinion contained in this report. The Fine Art Group are under no obligation to update or keep current the information provided herein. Information in this report is provided solely for information and marketing purposes and is not to be construed as investment advice or a personal recommendation, nor as legal, tax, regulatory, accounting or any other specialist technical advice. Capital is at risk when buying or selling the types of assets discussed in the report, and any decision to do so is solely at the risk of the buyer or seller. Prior performance is not indicative of future results. Neither The Fine Art Group nor any of its directors, officers, employees, or agents accepts any liability for any loss or damage arising out of the use of all or any part of this document or reliance upon any information contained herein.

The report contains hyperlinks or references to third-party advertising and websites other than The Fine Art Group website. Any such hyperlinks or references are provided for your convenience only. We have no control over third-party advertising or websites and accept no legal responsibility for any content, material or information contained in them. The display of any hyperlink and reference to any third-party advertising or website does not mean that we endorse that third-party’s website, products, or services. Your use of a third-party site may be governed by the terms and conditions of that third-party site and is at your own risk.

We remember our Sovereign Queen, Elizabeth II,
with enormous gratitude, great pride and a profound sense of loss.

Reigning Queens (Royal Edition): Queen Elizabeth II of the United Kingdom by Andy Warhol

Henry Little Presents to TheMerode

TheMerode is hosting a special evening September 19th, where they’ll survey recent auction results and forthcoming sales to spotlight key trends in the art market, as well as discussing important developments in the gallery scene and reviewing the year’s art fairs. 

Auctions, galleries and art fairs have been humming with business in 2022. Will that continue in the face of widespread economic uncertainty? And what will the coming year in the global art market bring? Will Paris take London’s crown in Europe? Will overheated market segments cool? And what can we expect in the major autumn auctions? 

Hubert d’Ursel, Director Benelux, has the pleasure to introduce industry expert Henry Little, Director of Art Advisory, who will offer his predications for the months to come, giving guests of TheMerode a chance to be up to date and ahead of the curve for the new market season.

FURTHER READING

Originally published on Tiger21.com, September 2, 2022


Market Insights for Fine Art Investment

While you might expect that Covid’s impact and an increase in inflation would deter art buyers at auction, Spring 2022 auctions in New York City demonstrated just the opposite.

With around $2.5 billion worth of art sold in the span of two weeks, the widely anticipated New York May Marquee Sales wrapped up the spring season, achieving new auction records and concluding the first half of 2022 at their highest level ever. Of the total sales, Post-War and Contemporary art accounted for 48.8%, while Impressionist and Modern art comprised 51.2%.

Photograph of crowd sitting in Sotheby's auction room in New York during the Spring 2022 auction season.

The Boost of the Season: Single-Owner Collections

The sales included major single-owner collections, which accounted for 38.5% of the total evening Marquee Sales, and raised a total of $795.3 million. Included were The Ammann Collection with landmark Post-War and Contemporary pieces; the Bass Collection of leading 19th– and 20th-century artworks by Claude Monet, Edgar Degas, and Mark Rothko, among others; and the Macklowe Collection, which became the most valuable single-owner collection ever sold at auction. The collection of Rosalind Gersten Jacobs and Melvin Jacobs showcased works from Dada and Surrealist movements.

New York Art Auction Records

Despite a backdrop of economic and political uncertainties, the evening sales set new auction records and strong sell-through rates. The headlining work from the Ammann Collection, Andy Warhol’s Shot Sage Blue Marilyn (1964), sold for $195 million with buyer’s premium[1], becoming the most expensive 20th-century artwork ever sold at auction, while Man Ray’s Le Violon d’Ingres (1924) achieved $12.4 million with premium, setting a record for the most expensive photograph sold.

Phillips had the most successful sale in its history. The sale was mainly driven by the 1982 Untitled by Jean-Michel Basquiat, which reached $85 million with premium, becoming the most expensive artwork ever sold at Phillips. The Marquee Sales set numerous artist records and saw a continuous rise in prices for artworks by young contemporary artists. Separate evening sales were dedicated to 21st-century art with works by female artists making up more than half of the lots.

Degas sculpture of ballerina in the foreground with a Rothko painting in red and orange hanging in the background at the New York Spring 2022 auctions.

Fine Art Investment: Looking Ahead

With a strong start in the first half of 2022, the auction market is preparing for the upcoming fall months. There will be a number of important single-owner collections available, including the Paul G. Allen Collection and the Ann & Gordon Getty Collection at Christie’s. Together with Frieze London in October and Art Basel Miami in December, the art market is expected to see a busy fall season.

As advisors to many collectors who are looking to invest in fine arts and acquire art as an asset, we feel that continuing to collect during periods of uncertainty may present advantages. With a potential recession in the coming months and various economic and political factors currently strengthening the U.S. dollar across Europe and the UK, an increased focus on asset acquisition might be expected, particularly in the art world.

FURTHER READING

[1]In addition to the winning bid for a lot at auction, known as the hammer price, auction houses charge buyers an additional fee known as a buyer’s premium, which is calculated as a percentage of the hammer price. Source

Morgan Long, Managing Director of The Fine Art Group, spoke with Barron’s about Christie’s sale of the Paul Allen Collection, what masterpieces she hopes to see for sale in November, and what this might mean about the health of the upcoming auction season.

Click here to find out more and read the article in full.

The approaching end of summer heralds not only the arrival of chillier weather, but a new wave of international art fairs. As the first fall since 2019 without lockdowns and covid restrictions, one can be sure the art world will be gearing up for another busy run of fairs in the next few months.

We have selected some of our top picks from around the globe. Be sure to look out for some familiar faces from The Fine Art Group’s Advisory Team if you drop by.

SOUTH KOREA

Seoul

Courtesy of Frieze Seoul.

KIAF Seoul
VIP – September 1-2, 2022
September 3-6, 2022

Frieze Seoul
VIP – September 2, 2022
September 2-5, 2022

Possibly the most anticipated art fair of the year, Frieze announced in May 2021 that they would open their fifth edition in Seoul, which is rapidly becoming the new hotbed of the global art market. Featuring over 100 galleries, it will take place alongside KIAF Seoul, South Korea’s first international art fair which will celebrate its twentieth anniversary this year. Like Frieze London, Frieze Seoul will also have a Frieze Masters section, as well as Focus Asia, a new feature showcasing young emerging Asian artists and galleries.

UNITED STATES

New York City

Courtesy of The Armory Show.

The Armory Show
VIP – September 8, 2022
September 9-11, 2022

Founded in 1994, the fair is located near the Chelsea gallery district in the Javits center. The first go-to event of New York’s fall art season, it will feature over 240 international galleries from over 30 countries. Its 2022 Platform section will also showcase a series of large-scale installations entitled Monumental Change. Co-ordinated by Tobias Ostrander, curator of Latin American Art at the Tate London, it will examine the current and controversial debate around public monuments. 

Miami

Courtesy of Art Basel.

Art Basel Miami Beach
VIP – November 29-30, 2022
December 1-3, 2022

While December may seem very far away, Art Basel Miami is the important bookend of what will surely be an exciting fall art season. Running off the back of the November New York sales, Art Basel Miami 2021 drew much attention for its inclusion of NFT galleries as exhibitors, as well as a partnership with blockchain Tezos, where visitors were encouraged to mint their own NFT. In the aftermath of the cryptocurrency market crash and fall in the NFT market, it will be interesting to see how techno-friendly the fair is this year.

UNITED KINGDOM

London

Courtesy of Frieze London.

Frieze London & Frieze Masters
VIP – October 12, 2022
October 12-16, 2022

Frieze’s inaugural London fair returns for its 19th edition, its first event’s since the UK government officially lifted all Covid restrictions. Set in Regent’s Park, it will also mark the first Frieze London since Victoria Siddal stepped down as global director. The 2022 Frieze Artist Award, which received submissions focused around sustainability, was recently awarded to emerging British Artist Abbas Zahedi. Having graduated from his MFA just three years ago, Zahedi will create an installation by the entrance of the fair, which will host a series of live activations within its structure.

FRANCE

Paris

Courtesy of Art Basel.

Paris+, par Art Basel
VIP – October 19, 2022
October 20-23, 2022

One of the biggest stories to hit the art world this year was the announcement of Art Basel’s new edition in Paris. Ousting prestigious French fair, FIAC, from its October slot at the Grand Palais, Paris +, signifies a major turn of events in the fair landscape. Including a Sites sector dedicated solely to artistic projects happening within the city, this newest Basel takeover is seen by many to signify the rise of Paris as a prominent market center in the wake of Brexit.

FURTHER READING

THE SCOOP #7 – August 15th, 2022

In our 7th edition of The Scoop, we cover the stabilizing markets, Blackrock partnering with Coinbase, airdrops, and the conclusion to Damien Hirst’s The Currency experiment.

CRYPTO MARKETS

Bitcoin to USD

Source: Google Finance

Ethereum to USD

Source: Google Finance

CRYPTO COMMENTARY

With the bounceback in traditional equity markets over the last couple of weeks, Bitcoin and the broader crypto markets have seen some stability while the crowd seems split as to whether the worst is behind us. The flow of bad news and lender defaults has slowed to a trickle, but many seem to have a bad taste in their mouth from the recent market washout.  

There is some good news though, as Blackrock and Coinbase have agreed to a partnership that would allow crossover for Blackrock clients to trade and manage crypto in-house. The agreement combines Blackrock’s Aladdin service with Coinbase Prime so institutions will have full control of their holdings in one place. The scale that Blackrock brings to this partnership sent Coinbase shares up 44% intraday but closing the day only 10% up.  

Amid rising interest rates, geopolitical tension, recession fears and a broader market selloff, this news is a breath of fresh air for a market that was slipping underwater. What this does on a larger scale is show that Wall Street’s appetite for crypto adoption is growing. More institutional adoption may be just what crypto needs to grow in price, maturity, and stability. Now that the biggest fund manager in the world is on board, who will be next? 

WHAT’S THE BUZZ?

Imagine looking in your wallet one day and finding a new piece of art from one of your favorite creators. How did it get there? An airdrop.  

AIRDROP

  • Airdrops are distributions of NFTs, tokens or cryptocurrency to a Web3 wallet address 
  • Use cases include marketing, additional perks for collectors, or showing proof of attendance 
  • They are often viewed as “dividends” for owning certain NFTs 
  • In many scenarios, creators use this tool to connect with their collectors. For example, devoted collectors of Daniel Arsham’s Eroding and Reforming collection on Nifty Gateway will be airdropped an exclusive 11th NFT if they collect all 10 that were released 

NFT BLUE-CHIP COLLECTIONS

Top 5 Collectible Collections 

Top 5 Photography Collections

NFT COMMENTARY

The recent rise in the value of Ethereum has led to a stabilization in floor prices, but we’re still seeing slower volume on OpenSea and other major marketplaces. In the next month or so we’ll be able to see if this was just everyone on summer break or if this is the new normal. 

Source: Tokenterminal 

While volumes and values have been treading water not all the metrics have done the same and we are still seeing growth in adoption. The total number of active users was up 2.2% over the last 90 days in a promising sign that this platform is still onboarding new collectors.  

In the bigger picture, there have been some conspicuous entries to the NFT market. In the social media world, Meta is working its way towards integrating NFTs into its popular Instagram platform so collectors can show off their pieces and creators can market their work. Major League Baseball is now giving away digital collectibles at their games; ticketholders can claim their NFTs with creative group Candy, introducing a vast audience to Web3. And last but not least, high fashion has jumped into NFT trends with Tiffany’s releasing NFTiffs, which are NFTs valued at $50,000 but paired with custom CryptoPunk avatar pendants. There are some differing opinions which Tiffany’s will have to contend with, but it doesn’t seem like they’re planning on backpedaling. Brands will have to watch how they manage their image in a whole new way moving forward.  

Alexandre Arnault tweeted his Tiffany & Co. CryptoPunks pendant in April 2022. Image: Courtesy of Vogue.sg and Tiffany & Co.

NFT ARTIST SPOTLIGHT

Damien Hirst

I was born into the curse by Damien Hirst

He is no stranger to the art world, but he was an early adopter in the NFT world. Damien’s experiment has literally caught fire. About a year ago when he released his collection, The Currency, he gave collectors an ultimatum about how they would ultimately get to keep their art. Each NFT was matched to a physical piece and at the end of the first year they had to decide which they would keep: the physical piece or the NFT. The one not chosen would be burned.  

Image is of a twitter tweet by contemporary artist Damian Hirst, describing the results of his recent art release The Currency, which gave buyers the choice between an NFT or physical art piece. The tweet describes that more buyers chose physical pieces than digital, but by a slim margin.
Source: Twitter 

It was not a surprise to the art world that the physical pieces were preferred, but what did raise an eyebrow was how slim the margin was. It wasn’t as lopsided as many expected — 51% chose the physical pieces and 49% picked the NFTs. Perhaps the most difficult decision was for the artist himself. He had to make a choice on his 1,000 pieces and opted for the NFTs on all of them. He churned on the decision for quite some time but laid it all out in a Twitter thread on how keeping them as NFTs would be the next logical step, saying he has “no idea what the future holds, whether the NFTs or physicals are going to be more valuable or less. But that is art! the fun, part of the journey and maybe the point of the whole project. Even after one year, I feel the journey is just beginning.” We’re with you Damien.

Source: OpenSea

NFT & CRYPTO NEWS

READ PAST ISSUES OF THE SCOOP

Disclaimer

Information in this report is compiled from a number of sources; The Fine Art Group does not make any representation or warranty, express or implied, as to its accuracy or completeness. The Fine Art Group shall not be liable for any errors or inaccuracies in this report or for any actions taken in reliance on information or opinion contained in this report. The Fine Art Group are under no obligation to update or keep current the information provided herein. Information in this report is provided solely for information and marketing purposes and is not to be construed as investment advice or a personal recommendation, nor as legal, tax, regulatory, accounting or any other specialist technical advice. Capital is at risk when buying or selling the types of assets discussed in the report, and any decision to do so is solely at the risk of the buyer or seller. Prior performance is not indicative of future results. Neither The Fine Art Group nor any of its directors, officers, employees, or agents accepts any liability for any loss or damage arising out of the use of all or any part of this document or reliance upon any information contained herein.

The report contains hyperlinks or references to third-party advertising and websites other than The Fine Art Group website. Any such hyperlinks or references are provided for your convenience only. We have no control over third-party advertising or websites and accept no legal responsibility for any content, material or information contained in them. The display of any hyperlink and reference to any third-party advertising or website does not mean that we endorse that third-party’s website, products, or services. Your use of a third-party site may be governed by the terms and conditions of that third-party site and is at your own risk.

THE SCOOP #6 – July 27th, 2022

In this edition of The Scoop, we cover the latest 3AC default news, consolidation in the NFT market, and dive into DAOs.

CRYPTO MARKETS

Bitcoin to USD

Source: Google Finance

Ethereum to USD

Source: Google Finance

CRYPTO COMMENTARY

After bank earnings have been reported there is a cautious sense of optimism in the markets with some green in the charts for a change. Many investors are waiting for the next CPI (consumer price index) numbers to come out before making any moves. The restless indecision has created some expected choppiness while JP Morgan warns we may not have seen the bottom yet. The cost to mine a single Bitcoin has dropped dramatically from $24,000 to $13,000 and it could lead to a further decline in the crypto’s value. The price to mine Bitcoin has fluctuated over time since it is so energy-dependent. At the peak in February 2022 it cost $33,500 to mine a single Bitcoin while the cost is now $18,900, a 43% decrease.

Source: MacroMicro

The drama continued in the lending space as bankruptcy filings for 3AC, the crypto hedge fund, revealed that the founders made a down payment on a yacht while ignoring their debts. They owe $3.5 billion to insolvent crypto lenders like Celsius and Voyager. The courts fear that 3ACs assets already may have been liquidated and transferred out of the fund with founders Su Zhu and Kyle Davies off the grid and not responsive.    

Many believe this event will lead to more cautious investors, slower adoption and more stringent rules from the government. The coming regulation could create more accountability for the malicious actors and build protections for retail investors similar to the traditional securities markets. It feels like we’re moving away from decentralization and more Wall Street, which is a bit of a paradox since that’s what crypto was built to avoid, the traditional banking system.

Incomplete Control #84 by Tyler Hobbs

WHAT’S THE BUZZ?

With so many new communities popping up in Web3, we’re seeing a new form of management in those communities in the form of DAOs. It’s like a corporate structure for decentralized entities.   

DAO

  • DAO stands for Decentralized Autonomous Organization.  
  • It is a structure where token holders take part in the decision making and management of the group.
  • With no central authority, the power is distributed across the token holders who cast votes on initiatives proposed by the community.  
  • Many organizations place their votes on blockchain where the results can be publicly viewed  
  • Security is crucial for DAOs as any exploit could drain them of their holdings, the most notable being The DAO Hack of 2016 resulting in a $50 million loss.
  • A great application of this concept is LinksDAO, a group of golf enthusiasts who are building a community around the game with the goal of owning a golf course. Their token release will be helping fund the purchase and members will be voting on where the course will be along with other initiatives to grow their footprint.

NFT BLUE-CHIP COLLECTIONS

Top 5 Collectible Collections 

Source: OpenSea

Top 5 Photography Collections

Source: OpenSea

NFT COMMENTARY

With green in the crypto markets comes an uptick in the NFT markets. The speed of the consolidation into blue chip projects has increased with Bored ApesCryptoPunks, and Art Blocks increasing in both value and volume. Many other projects have been stuck in neutral, with either modest gains or slight declines despite a lift in the cryptocurrency value.  

The recent dip has given everyone a renewed perspective on what value is. Some projects didn’t survive, and maybe that’s a good thing. Collectors are getting pickier with NFTs they’re putting money into, and the two biggest drivers are history and utility. If a project doesn’t have any cultural significance or doesn’t grant access to any meaningful perks, collectors are passing on it.    

In a meeting recently, we were asked what we thought about the recent market pullback. We think it was bound to happen after an explosive first year and necessary to bring sky-rocketing expectations back to earth. The amount of building in this space by both artists and other industries is increasing during this market lull, and the technology cannot be ignored at this point. Christie’s has launched a new enterprise named Christie’s Ventures to engage with early-stage companies in Web3.0 innovation, art-related financial products, and solutions and technologies that enable seamless consumption of art. This is a positive sign and possibly an indicator of more players entering the space.

NFT ARTIST SPOTLIGHT

Tyler Hobbs

The Austin, Texas-based artist behind the iconic Art Blocks Fidenza collection has had creating in his blood from a very young age. He took up painting when he was little with inspiration from Van Gogh and other landscape artists he had seen with the goal of becoming an artist. For pragmatic reasons, Hobbs was persuaded by his dad to study computer programming and got a programming job in his 20s while still creating on the side.

One day he had an idea: “What if I wrote a program that created a painting?” Hobbs went to work on combining his two passions and developed algorithms that would do just that. Tyler was sharing his work on social media and eventually he was getting messages on Twitter about NFTs. The rest is history. 

Source: OpenSea

The above chart shows all the volume (vertical bars) this collection has seen in July with the price (blue line) gradually going up. They have seen a recent resurgence in secondary sales as the rest of the Art Blocks collection continues to grow. Fidenzas have become a grail item for many in the collecting space with only 999 of them in existence. Many have placed historical value in this collection since it was one of the first formal Art Blocks releases. 

Fidenza #799 by Tyler Hobbs

NFT & CRYPTO NEWS

READ PAST ISSUES OF THE SCOOP

Disclaimer

Information in this report is compiled from a number of sources; The Fine Art Group does not make any representation or warranty, express or implied, as to its accuracy or completeness. The Fine Art Group shall not be liable for any errors or inaccuracies in this report or for any actions taken in reliance on information or opinion contained in this report. The Fine Art Group are under no obligation to update or keep current the information provided herein. Information in this report is provided solely for information and marketing purposes and is not to be construed as investment advice or a personal recommendation, nor as legal, tax, regulatory, accounting or any other specialist technical advice. Capital is at risk when buying or selling the types of assets discussed in the report, and any decision to do so is solely at the risk of the buyer or seller. Prior performance is not indicative of future results. Neither The Fine Art Group nor any of its directors, officers, employees, or agents accepts any liability for any loss or damage arising out of the use of all or any part of this document or reliance upon any information contained herein.

The report contains hyperlinks or references to third-party advertising and websites other than The Fine Art Group website. Any such hyperlinks or references are provided for your convenience only. We have no control over third-party advertising or websites and accept no legal responsibility for any content, material or information contained in them. The display of any hyperlink and reference to any third-party advertising or website does not mean that we endorse that third-party’s website, products, or services. Your use of a third-party site may be governed by the terms and conditions of that third-party site and is at your own risk.

2022 Jewelry Market Report to Date

​​The two sale seasons at auction for significant jewels occur in the May/June time frame and in December, selling across sale rooms in Geneva, Hong Kong, and New York. Several important stones sold at auction in the first half of 2022, the most valuable of which was the “De Beers Blue” which sold for $57.4 million at Sotheby’s, Hong Kong. It was the largest vivid blue diamond to sell at auction and one of the highest prices ever paid for a diamond at auction.

An analysis of the significant jewelry sales at auction so far this year show three areas of strength: colored diamonds, pieces by established luxury makers such as Harry Winston and Cartier, and strong value appreciation of specimen stones such as the paraiba tourmaline and spinel.

SOME KEY TAKEAWAYS

  • The global jewelry market has an upwards trend, with an anticipated CAGR of 15.39% by 2026, with 29% of growth within North America.​. 
  • Unusual specimen stones such as paraiba tourmalines and spinels have seen increased interest and appreciation on the market due to demand from Asia.

TOP FIVE SOLD​ JEWELRY PIECES IN 2022 TO DATE

A MAGNIFICENT AND SPECTACULAR FANCY VIVID BLUE DIAMOND​​
The step-cut fancy vivid blue diamond weighing 15.10 carats​​
The De Beers Blues​
Sotheby’s, Hong Kong​
April 27, 2022​
Lot 1800​
SOLD:  $57,466,161
THE ROCK A SENSATIONAL DIAMOND​​
228.31 carats, G color, VS1 clarity, excellent polish and symmetry​​
Magnificent Jewels Sale​
Christie’s, Geneva​
May 10, 2022​
Lot 26​​
SOLD:  $22,371,214
THE LIGHT OF AFRICA DIAMOND​
103.49 carats, D color, Flawless, excellent polish and symmetry, Type IIa
Magnificent Jewels Sale​
Christie’s, New York​
June 1, 2022​
Lot 3​
ESTIMATE: $11,000,000 – 18,000,000​
SOLD: $20,084,000
THE RED CROSS DIAMOND A SUPERB COLORED DIAMOND​​
Fancy intense yellow cushion modified brilliant-cut diamond of 205.07 carats​​
Magnificent Jewels Sale​
Christie’s, Geneva​
May 10, 2022​
Lot 61​​
SOLD:  $14,626,895

THE JUNO DIAMOND​​
Pear-shaped diamond weighing 101.41 carats.​​
Magnificent Jewels Sale​
Sotheby’s, Hong Kong​
June 16, 2022​
Lot 487​​
SOLD:  $12,963,500

COLORED DIAMONDS

According to the Fancy Color Diamond Index (FCDI), which tracks and analyzes wholesale prices of colored diamonds, the market value of fancy-colored diamonds has typically increased 9-12% annually in recent years. Though not all colored diamonds are created and valued equally, even lower quality colors have appreciated in value. For example, fancy pink diamonds, a lower grade, gained 325.6% in price from the start of 2005 through the first quarter of this year, while fancy vivid pink diamonds, a high grade, achieved 427.8% growth. In comparison, the price of gold gained 300% over that period, and the S&P was up 384%.

​MAGNIFICENT JEWELS SALES

The success of colored diamonds is made evident by their performance at the 10 Magnificent Jewels sales held by Christie’s and Sotheby’s in the first half of this year. Two of the top five pieces sold in 2022 were colored diamonds, with the overall highest-grossing piece being the Fancy Vivid Blue Diamond from Sotheby’s De Beers Blue sale. Further, the other top-grossing colored diamond, the Red Cross Diamond from Christie’s Magnificent Jewels sale in Geneva, exemplifies the popularity and desire for yellow diamonds, which accounted for most colored diamonds in the Magnificent Jewels sales. Of the top 12 colored diamonds sold in Magnificent Jewels auctions in the first two quarters of 2022, all but one performed above estimate range.

AN EXQUISITE FANCY INTENSE PINK DIAMOND​​
Old-mine cut Fancy Intense Pink diamond weighing 4.08 carats​​
Magnificent Jewels Sale​
Christie’s, New York​
June 1, 2022​
Lot 3​​
ESTIMATE: $1,200,000 – 1,800,000​
SOLD:  $3,801,000
A RARE FANCY GRAY-VIOLET DIAMOND​​
Old mine-cut Fancy Gray-Violet diamond weighing 3.46 carats​​
Magnificent Jewels Sale​
Christie’s, New York​
June 1, 2022​
Lot 3​
ESTIMATE: $1,200,000 – 1,800,000​
SOLD:  $3,801,000

WHAT IS IN A JEWELRY BRAND NAME?

JEWELRY BY IMPORTANT MAKERS​

  • HARRY WINSTON​
  • CARTIER​
  • VAN CLEEF & ARPELS​
  • JAR​
  • BULGARI

Highly esteemed and established makers including Harry Winston, Cartier, Van Cleef & Arpels, JAR and Bulgari, were present across Magnificent Jewels auctions in New York, Hong Kong, and Geneva. Sales highlighted the continued confidence and trust in these major names, as exhibited by the sale of a Harry Winston Diamond Necklace from Christie’s New York, which performed 323.4% above its conservative estimate of $300,000-500,000, grossing $970,200. Similarly, a Harry Winston Diamond Ring at Christie’s Geneva scored 129.66% over its low estimate, further illustrating the brand’s prestige and reputation. Other makers such as JAR continue to have soaring prices on the secondary market due to a strong demand and limited supply.

JAR ​
Agate, Diamond And Sapphire Zebra Brooch
​​
Carved banded agate, round diamonds, marquise-shaped cabochon sapphire, black enamel, silver and 18k yellow gold​​
Magnificent Jewels Sale​
Christie’s, New York​
June 1, 2022​
Lot 3​​
ESTIMATE: $50,000 – 70,000​
SOLD:  $554,400
VAN CLEEF & ARPELS ​
A Highly Important ‘Mystery-Set’ Ruby and Diamond Clip-Brooch, France​​
Designed as a leaf with numerous undulating calibré-cut rubies en serti mystérieux, accented with baguette and tapered baguette diamonds​​
Magnificent Jewels Sale​
Christie’s, New York​
June 1, 2022​
Lot 3​
ESTIMATE: $50,000 – 70,000​
SOLD:  $982,800
HARRY WINSTON ​
Diamond Necklace​​

Round, baguette and pear-shaped diamonds, platinum​​
Magnificent Jewels Sale​
Christie’s, New York​
June 1, 2022​
Lot 3​
ESTIMATE: $300,000 – 500,000​
SOLD:  $970,200
HARRY WINSTON ​
Diamond Ring​​

Centering a pear-shaped diamond weighing 22.80 carats, flanked by tapered baguette diamonds, size 4¾, with sizing spheres​​
Magnificent Jewels Sale​
Christie’s, New York​
June 1, 2022​
Lot 3​
ESTIMATE: $400,000 – 600,000 ​
SOLD:  $882,000
VAN CLEEF & ARPELS​
Emerald and Diamond Pendant Necklace​​

The pendant set with a step-cut emerald weighing 83.21 carats, surrounded by pear- and marquise-shaped diamonds weighing a total of 17.66 carats, suspended from a brilliant-cut diamond necklace, mounted in platinum, 18 karat white and yellow gold​​
Magnificent Jewels I Sale​
Sotheby’s, Hong Kong​
April 29, 2022​
Lot 1837​​
ESTIMATE: $866,244 – 1,146,500​
SOLD:  $1,091,468
VAN CLEEF & ARPELS​
An Impressive Boreal Necklace​​

Centering a pear-shaped diamond weighing 22.80 carats, flanked by tapered baguette diamonds, size 4¾, with sizing spheres​​
Magnificent Jewels Sale​
Sotheby’s, New York​
June 16, 2022​
Lot ​​
ESTIMATE: $1,00,000 – 1,500,000 ​
SOLD:  $1,197,000
OSCAR HEYMAN & BROTHERS 
An extraordinary gem set and diamond bracelet, ‘Birds in Flight’​​
Articulated bracelet of exotic inspiration, decorated with tropical birds in flight amidst floral sprigs, pierced and millegrain-set with buff top rubies, emeralds, sapphires, and onyx as well as circular-cut diamonds, length approximately 185mm, unsigned, numbered​​
Magnificent Jewels and Nobel Jewels Sale​
Sotheby’s, Gevena​
May 10, 2022​
Lot 400​​
ESTIMATE: $472,454 – 748,890​
SOLD:  $1,449,027
CARTIER 
An Exceptional Ruby, Sapphire and Diamond Bracelet, Paris​​
Designed as a wide band, decorated with old European-, single- and French-cut diamonds, accented by calibré-cut rubies and sapphires and pear-shaped rubies, length 7⅜ inches, signed Cartier Paris Londres New York, with French assay and partial workshop marks; circa 1930​​
Magnificent Jewels Sale​
Christie’s, New York​
June 1, 2022​
Lot 3​​
ESTIMATE: $150,000 – 250,000​
SOLD:  $466,200

RARE AND UNUSUAL STONES

2022 has seen increased interest and appreciation in value for unusual specimen stones such as paraiba tourmalines and spinels.

PARAIBA TOURMALINES

The Fine Art Group was pleased to assist a client in selling its exceptional Paraiba Tourmaline and Diamond Pendant-Necklace. The result was the second highest amount secured for a Paraiba at auction and shows the strength of the market for outstanding specimen stones of rarity. Other paraiba tourmaline pieces also saw prices soar above estimate. One pair of Boodles paraiba tourmaline and diamond earrings from Sotheby’s Magnificent Jewels & Nobel Jewels sale in Geneva performed 705.6% above the conservative estimate of $50,000-70,000, selling for just over $360,180. In parallel, a superb paraiba tourmaline and diamond ring from the same maker also sold for $540,270, 264.5% higher than the conservative estimate of $200,000-300,000. Stewart Young, Head of Jewelry for Asia at Bonhams, notes that the market price of Paraiba has soared in recent years as it has become a desired stone by many Asian collectors.

SPINELS

Another area of strong results are spinels. These rare stones were often mistaken for rubies. In 2022, exceptional examples have seen results soar past auction estimates. A significant 54 carat specimen example sold at Christies, Geneva for $504,000 against an estimate of $200,000-300,000.

For both paraiba tourmalines and spinels, color saturation and size play an important role in determining the examples of significant value.

AN EXCEPTIONAL PARAIBA TOURMALINE AND DIAMOND PENDANT-NECKLACE​​
Suspending a modified triangular brilliant-cut Paraiba tourmaline weighing 10.31 carats, capped and accented by round diamonds, length adjustable from 14 to 18 inches​​
Magnificent Jewels Sale​
Christie’s, New York​
June 1, 2022​
Lot 3​​
ESTIMATE: $500,000 – 700,000​
SOLD:  $1,197,000
RARE SAPPHIRE AND DIAMOND RING​​
Set with a cushion-shaped sapphire weighing 5.95 carats, between pear-shaped diamond shoulders, size 56, Italian assay marks for gold and platinum and maker’s mark​​
Magnificent Jewels and Nobel Jewels Sale​
Sotheby’s, Gevena​
May 10, 2022​
Lot 399​
ESTIMATE: $281,462 – 467,428​
SOLD:  $823,376
IMPRESSIVE SPINEL PENDANT​​
Pear-shaped spinel of 54.03 carats, 18k rose gold​​
Magnificent Jewels Sale​
Christie’s, Geneva​
May 11, 2022​
Lot 38​​
ESTIMATE: $204,875 – 307,313​
SOLD:  $516,286

OUR SERVICES

Offering expert Advisory across sectors, our dedicated Jewelry Advisory Team combine strategic insight with transparent advice to guide our clients seamlessly through the market. We always welcome the opportunity to discuss our strategies and services in depth.


Images: All images courtesy of associated auction houses

Listen to Our Latest 20-Minute Webinar

We invite you to listen to the below webinar where Philip Hoffman, CEO, and Anita Heriot, President of the Americas, further discuss the economic advantages of diversifying into art or collectibles and where to take caution when considering an investment.  

How to Utilize Your Collections as a Hedge Against Inflation

Our CEO & Founder Philip Hoffman speaks with President Anita Heriot in a 20-minute virtual forum. Watch to learn about the latest on inflation and how to leverage collections to maneuver through the current economic climate.

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ART & INFLATION IN 2022

In recent months, as inflation rates have surged and stock markets have slumped on both sides of the Atlantic, collecting art has increasingly become recognized as a solid investment strategy. Whilst not all artworks and collectibles are created equally, and therefore do not offer the same possible financial protection, the art market has historically shown resilience during market downturns and is largely uncorrelated to other major asset classes. The right art investment has proven to be an excellent store of wealth over all time periods, exceeding inflation.

CASE STUDY

The best – and only – case study of art investment as a hedge against inflation is that of the British Railway Pension Fund, which specifically and successfully bought art in the 1970s against a backdrop of inflation rates as high as 17%. The fund invested 3% of its holdings at the time (£40m) into 2,400 objects across a vast range of categories and achieved an annual compound interest of 13.1%, while the average stock market investment returned 10%.

ART IN THE POST-PANDEMIC MARKET

Apart from hedging against inflation, we see the benefit of art being uncorrelated to other asset classes in the speedy recovery of the market during moments of economic decline. In 2021 – as the world entered a post pandemic recession – auction sales totaled around $12.6B at the three major auction houses (Sotheby’s, Christie’s and Phillips) up 2.3% from 2018. Furthermore, collectors returned to the market with a renewed appetite for buying and 167 artworks achieved $10m+ each, twice as many as the previous year. The market so far in 2022 continues to go from strength to strength with the ArtPrice Contemporary Art Index reporting a 16.2% year to date increase compared to the S&P, which is down 14% over the same period.

TOP 5 TAKEAWAYS

AUDIT YOUR COLLECTION

It is crucial to understand the current fair market value of your collection before making any financial moves. Once you have this information, you can then develop a strategy.

BE PREPARED TO HOLD ART FOR 3 TO 5 YEARS

Art acquisitions typically should not be liquidated for several years. With annual revaluation, one can develop an intelligent sales strategy that corresponds to the market.

STICK WITH BLUE-CHIP ARTISTS

Now is not the time to risk investing in Young Contemporary artists with little track record. Stick to blue-chip artists with an established secondary market that has steadily increased in value. There may be some fantastic buying opportunities in the near future, with masterworks coming to market to bring their owners liquidity, with less competition from other buyers.

DIVERSIFY YOUR ART & COLLECTIBLES

Look to other opportunities in the collectibles market such as jewelry and watches of the highest quality possible.

DO YOUR HOMEWORK

Be sure to turn to a trusted advisor and research your options before committing to any important financial decisions.

FURTHER READING