Scott Reyburn’s article in The New York Times touches on how new technologies like blockchain’s decentralized record-keeping can change the art market. I, for one, have a difficult time believing that the art world will truly embrace it. The art world is made up of so many individual players from dealers and galleries who want nothing to do with each other to buyers and sellers who want to remain anonymous. How is blockchain going to work if people will not share all the information?
Scott also notes that all this talk about how this new technology will revolutionize the art market has led to the emergence of new art funds. You know, financial gurus who believe they can create great returns for people by investing in art. That brings back memories from the early 2000s when art funds were popping up left and right … most of them are no longer in existence and I am sure many people lost their shirts, pants, and shoes — not to mention, money. When there is money to be made, everyone wants a piece of the action. There is a simple way for someone to make money in the art world, become an art dealer. Ok, it isn’t as simple as that since it takes years, even decades, to understand any individual market and know the difference between the good, the bad, and the ugly works.
We can all agree that the art world is one of the most inefficient markets out there. This is beautifully illustrated each time a work is first sold in some small venue (a country auction) and then quickly resold in another larger venue (New York or London saleroom) for much more. What is never revealed is all the times this strategy fails … and it happens all the time.
My advice has always been the same. When someone tells you that a work they are offering today is definitely going to be worth more money tomorrow, ask them to show you their crystal ball. When they don’t, run! If they really knew the work would be worth more tomorrow, then why wouldn’t they wait until tomorrow to sell it?
What people need to remember is that throughout history, art was not bought as an investment. Patrons and collectors bought a work for its beauty and their ability to own it, touch it, enjoy it, and live with it.