If you are still unsure about the potential that art can provide as an alternative investment opportunity, take a look at some recent sales at one of the latest auctions.
The Coeur d’Alene Art Auction, held on July 28 at the Grand Sierra Resort in Reno, specialising in Fine Western and American art, sold more than 90% of its lots and amassed over $13.2 million in sales. One of the biggest sellers was The Thirsty Trapper (1850) by Alfred Jacob Miller, an oil on canvas piece which achieved $1.7 million.
That’s an impressive sum, and will have likely repaid the faith of the seller who chose to invest in the artwork as an alternative investment opportunity when they first saw the painting. When it comes to art as a diversified investment, though, the rewards could be even greater.
How you can access fine art as an alternative investment
At the extreme end of the spectrum, for instance, is the case of the ‘most valuable painting in the world’. Salvator Mundi by Leonardo da Vinci, a painting of Jesus Christ commissioned by France’s King Louis XII over 500 years ago, was auctioned by Christie’s in New York in November 2017 for a world-record $450.3 million.
That value is well above other previous records at auction, including Pablo Picasso’s 1955 Women of Algiers (Version O) which was auctioned for $179.4 million, with Amedeo Modigliani’s 1917-18 Reclining Nude close behind at $170.4m.
Little wonder then that so many investors become enchanted by the idea of art as an alternative investment. As powerful and alluring as those sales prices are though, they represent a double-edged sword for investors looking to enter the art market.
High prices present a naturally high barrier for entry to people looking at art as a diversified investment; for instance, from July 2016 to end-June 2017, Contemporary Art generated a global auction turnover of $1.58 billion.
That’s a rise of 3.2% over the same year-earlier time frame; at the same time, the average price for a work of contemporary art has risen from $26,160 to $27,600. The market is highly competitive, dealers and auction houses have tight control over information, buyers’ and sellers’ premiums are awfully high at the world’s most prominent auction house.
How can an investor realistically look at art as a diversified investment if they don’t own a fortune?
How blockchain technology is democratising the art market
Maecenas is working to lower those barriers and open the wider art market to alternative investment professionals with blockchain technology.
Maecenas’ platform works to remove middle men in the form of the auction house and galleries to better connect artists, buyers, sellers, collectors, investors and others in a fully democratic way.
Artworks can be put through Maecenas’ Dutch auction process, allowing people to bid to own digital shares of artworks and potentially own some of the world’s most prominent masterpieces.
Blockchain technology and our own cryptocurrency, the ART token, allows this to happen in a fully open, transparent and incorruptible way through the ‘blockchain ledger’. Tokenising artworks can help investors to own shares in famous works, as well as throwing open the doors of a market that’s desperately in need of modernisation.
Maecenas is more than just a way for investors to enter the market - it also benefits the seller. Whether you are an art owner, gallery or collector looking to sell shares in your artworks to generate funds or a buyer looking to bypass enormous gallery commissions and realistically have a chance in owning part of an artwork, Maecenas could help you do that with our world-leading blockchain art investment platform.
Find out more about the benefits that Maecenas can bring to investors in our Art Investment Explainer Document.