What’s the Value of an NFT: A Look into Traditional Art Market Principles

What makes art valuable anyways?

At the end of the day, the value of NFT artworks is determined by many of the same factors that determine the prices of traditional artworks: the notoriety of the artist, the value of other works sold by the same artist, scarcity of their work, provenance, historical significance and the amount of work and skill required to produce the work.

Authenticity

In all art and collectibles markets, to be truly collectible an object should be authentic, meaning that it can be attributed to an artist or specific maker with certainty.

Walter Benjamin, author of “The Work of Art in the Age of Mechanical Reproduction

Scarcity

The art market is just like any other market, in that it’s ruled by supply and demand. As an artist, you control the supply of your work.

“Bitcoin Angel” by Trevor Jones

Notoriety of the Artist

The notoriety (and popularity) of the artist is one of the most important aspects for determining the value of an artwork. It’s the reason why works by De Vinci, Van Gogh, and Monet sell for such high figures.

Burning Banksy work by the artist group Burnt Banksy

Value of other works sold by the same artist

The value of an artwork is strongly affected by the prices of the artist’s other works. Before most collectors purchase an artwork, they try to gain insights into what the artist’s other artworks have sold for in the market.

Provenance

Provenance, or who has previously owned the work, plays a significant role in the established analog art market. Although the NFT art market is new and provenance seems to play less of a defining role, it may be increasingly important as the technology and market become more established.

Medium

The medium of the artwork is also correlated to the price of the artwork. The amount of work (time), the skill required, and the cost of materials should play into the price charged for the artwork.

Historical Significance

The historical significance of a work can have a drastic impact on the value of an artwork. People often want to own a piece of history.

Everydays: the First 5000 Days” by Beeple
Charlie Bit My Finger viral video

The relatability of the work

Lastly, the relatability of the work and the artwork’s ability to connect to others on a personal level can affect its art market value.

Valuing your NFT artwork

When pricing your NFT artworks and purchasing the next NFT for your collection consider these factors, it’s important to consider all of these art market aspects.

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Alyssa Travis

Alyssa Travis

The Crypto Curator of NFT Art. Instagram: @thecryptocurator