How A Digital Artwork Sold For Over $69 Million

Beeple, NFTs, Bitcoin, “minting,” and crypto-art have become buzz words of the art world as of late. A catalyst to such discussion surrounding digital artwork was the Christie’s auction house art sale dedicated to digital art that was carried out in March 2021. Dive in with Artsper to uncover the real influence of NFTs upon the traditional art market as we know it.

Beeple’s JPG file

“Did you hear that a JPG file sold for $69 Million?” people muttered, as an “NFT Mania” escalated in the preceding days of the sale. The NFT entitled Every days: the First 5,000 Days by Beeple propelled the digital art market into a mad frenzy. A frenzy that, almost a year on, has no signs of stopping.

In the beginning, many nodded their heads at the mention of NFTs without understanding of this new buzz term. Now, such eye watering valuations are causing auction houses, art collectors and artists alike to engage with the medium. In order to investigate how a digital artwork sold for $69,346,250 we must first understand the nature of Non-Fungible Tokens.

The history of digital artwork

When we speak of a history of the digital art market, it might at first seem juxtapositionary. Instead, digital art is not to be considered as an entirely modern or new form of art. It does in fact hold a history (albeit a relatively short one). The term “digital art” was first used in the early 1980s. Computer engineers designed a painting program used by pioneering digital artist Harold Cohen, called AARON. Digital art can be generated by computer, scanned or drawn with a tablet and mouse. Since then technological advances have given way to multiple new veins of digital artwork including the subsidiary of the NFT.

The history-book-worthy events of March 11th, 2021

After a flurry of more than 180 bids in the final hour, a JPG file made by Mike Winkelmann under the alias Beeple, was sold on the 11th March 2021 in an online auction for $69.3 million excluding fees. The sale was carried out by Christie’s, the 255-year-old auction house. The price was a new high for an artwork that exists in a digital medium. Astoundingly, the figure beat auction records for physical paintings by archetypal greats like Da Vinci, Turner, de Kooning, Cézanne and Goya.

Bidding began at $100, at the two week Beeple sale consisting of just one lot. In the remaining seconds of the sale, the figure was set at just shy of $30 million. However in a dramatic turn of events a climatic bidding cascade led to a two-minute extension of the sale and pushed the final price over $60 million. It was later revealed that 33 active bidders pushed the bidding up in the final minutes resulting in its record auction price. Only after Jeff Koons and David Hockney does Mike Winkelmann rank as achieving the highest auction price achieved for a living artist.

The reasoning behind NFT’s popularity

​​The cornerstones of the art market, the exclusive auction houses Christie’s and Sotheby’s have taken note of the boom in the NFT medium and are cashing in. Christie’s latest Art + Tech Summit, dedicated to NFTs, sold out. So why are people buying NFTs? For investment purposes, for the sake of jumping on the bandwagon, for the ideological thrill of overthrowing the archetypal art world hierarchy, to make huge fortunes quickly? All these examples are possible and continue to make art market analysts scratch their heads.

Beyond Beeple and his NFT, the market is growing. When we see headlines like Ukraine’s government plans to fund its war through the sale of NFT art, we begin to understand the amplitude of this art form. When asked by the The New York Times, Todd Levin, a New York art advisor, spoke of mixed emotions about the $69.3 million sale. “On the one hand, it’s super exciting to witness a historical inflection point. On the other hand, the amount of money involved could skew and damage a nascent emerging market,” Levin said. Is all lost for NFTs before the market has even got started?

The most valued artworks of all time

If we look at a historical list of the highest prices received by works of art at auction, Beeple’s NFT has a ways to go. As it stands the most expensive artwork to have previously been sold is Leonardo da Vinci “Salvator Mundi” (c. 1500) that went for $475.4 million at Christie’s auction house in 2017. However, if we consider that a few years ago, NFTs were considered worthless (and still are to some!) then this increase in value is extortionate. We can only imagine where the value of NFTs will rise to in coming years. Nonetheless, its skeptics believe the NFT market, much like the cryptocurrency market, can be allegorized as a bubble about to pop.

Where will NFTs take us? The future of digital artwork

Whether we like it or not, NFTs have begun to have a serious impact on our lives. Whether that be to lasting effect (or not) is to be discovered over time. Certainly, their anti-establishmentarian nature responds well to a younger, more dynamic generation that the historic art market has typically negated.

NFTs by their very nature are hard to justify ideologically if we consider the ecological consequences and capitalist inflation they propagate. Some, however, are using this digital gold rush to bring some good into the world. Jack Dorsey, the co-founder of Twitter, sold his first tweet as an NFT in a timed charity auction.

Now collaborating with the famous auction houses NFT artists have previously opposed, it is hard to predict the future of the medium due largely to its unclear ideology and contradictory nature. Since Beeple’s Every days: the First 5,000 Days, another NFT has taken the reign for the most expensive ever sold. The Merge by the pseudonym Pak, was sold on NFT marketplace Nifty Gateway at the end of 2021. It fetched a record sum of USD 91.8 million. This demonstrates a concrete trend.

Nevertheless, there is much speculation as to whether these eye watering prices will continue to inflate or whether a new kid on the block will dethrone the NFT. For now, the market for physical artwork appears safe from replacement as the NFT skeptics prefer the stability it offers. Despite this, John Watkinson thinks differently. An insider to the market as co-founder of CryptoPunks. He reflected, “art is no longer about a relationship with an object. It’s about making money,” he said, “I feel bad for art.”