Could the Rise of a Bitcoin Art Market be Imminent? – artmarketblog.com

bitpremier niemann2 Could the Rise of a Bitcoin Art Market be Imminent?   artmarketblog.comIf you have heard of the virtual currency Bitcoin but have no idea what it is or how it works, then you are not alone. Unfortunately the Bitcoin concept is rather complex and becomes even more complex the further you delve. However, if you have an interest in the art market you may want to consider making the effort to familiarise yourself with the Bitcoin concept as it has the potential to change the way art buyers and sellers to business – if, that is, the Bitcoin concept proves viable in the long term, which seems unlikely at the present time. But that doesn’t mean that the concept isn’t worth investigating further.

The most relevant Bitcoin enterprise for those interested in the art market is the recently launched online luxury marketplace BitPremier. BitPremier was launched in May and is currently offering for sale an original work by renowned American photographer Peter Beard for 11,671.089 BTC (US$1,100,000.00) and a LeRoy NeimanBasketball Superstars” lithograph for 103.448 BTC (US$9,750.00).

Another art related Bitcoin enterprise that is currently being developed is an online virtual art gallery called Art4Bit which is described on its website as “a virtual art gallery which operates internationally and which is crypto-currency-oriented.” Also worth noting is the fact that the online fine art and antique auction house Aspire Auctions recently announced that they would accept Bitcoins as payment. Could Sotheby’s, Christie’s, or Bonhams be next?

When it comes to explaining the Bitcoin, there is really no “simple” way of properly conveying the concept of the Bitcoin and all its nuances, but I’ll give it a go anyway. For the uninitiated, a Bitcoin is basically a type of decentralized virtual currency that can be transferred online between Bitcoin users to make payments or buy goods. It is the first practical implementation of what is known as “cryptocurrency,” a type of digital currency that is based on cryptography. In a way using a Bitcoin is like using shares from a share portfolio as a form of currency to buy goods. If you want to learn more about the Bitcoin then head to the Bitcoin wiki page here.

As one would expect there are several significant benefits to using Bitcoins to buy goods. To begin with Bitcoins are not controlled by the government or by financial institutions. This makes them rather appealing to those who are anti-establishment. For those who are paranoid about revealing personal details through the use of credit cards or want to protect their identity for other reasons, Bitcoin transactions offer a higher level of anonymity than credit card transactions. For art collectors and investors the most relevant benefits include the minimal transactions fees and the potential to avoid paying taxes on transactions.

The benefits of using Bitcoins are relatively straightforward, but there are some major problems with the currency that people need to be aware of. Firstly, the value of a Bitcoin has fluctuated wildly since it was first launched. Secondly, the market is unregulated. Thirdly, the future of the Bitcoin marketplace is uncertain. Then there are the questions relating to the security and legality of the Bitcoin marketplace for which no-one seems to have a definitive answer. The biggest problem for art buyers and sellers, however, is Bitcoin’s volatility.

One of the best people to explain the implication of the Bitcoin marketplace for art buyers and art sellers is the CEO and Founder of BitPremier, Alan M. Silbert. Alan was kind enough to take some time out of his busy schedule and answer some questions about Bitcoin and BitPremier.

What led to the development of BitPremier?

After becoming increasingly more bullish on Bitcoins, we wanted to get involved in the space and find something the Bitcoin market was lacking. We came up with the idea of BitPremier after we discovered that nothing existed in the Bitcoin luxury space.  Buyers in the Bitcoin community were finding limited venues for where to spend their Bitcoins – pretty much t-shirts, poker chips, and electronics.  So we wanted to open them up to a new universe of offerings.

What benefits do BitPremier and the Bitcoin system offer buyers of fine art?

BitPremier elevates the purchasing power of Bitcoins so that buyers have interesting and unique high-end items to spend their Bitcoins on, like fine art.  As buyers gain purchasing power through what we believe will be the strong appreciation in Bitcoins in the future, they will be looking for more unique opportunities for where to spend them.  Spending appreciated Bitcoins is also more preferable from a tax perspective since the alternative, exchanging Bitcoins back into their local currency, is a capital gains or income tax event.

What benefits does BitPremier and the Bitcoin system sellers of fine art?

Our fee structure is very transparent.  BitPremier charges no fees to list, which is an unusual benefit in the fine art market.  We only charge a five percent fee if an item sells.  This is a big discount from using an art auction house or other art consignment venue.  Additionally, it gives the seller access to a virtually untapped $1+ billion market of Bitcoin buyers that have Bitcoins to spend.  Accepting Bitcoins for their listing, the seller can be as anonymous as they want to be.  We maintain the privacy of both buyer and seller until the transaction terms are finalized, so the seller can feel out the market without revealing who they are.  We act as the intermediary and isolate only serious buyers.  Using Bitcoins also ensures a fraud-fee, irreversible transaction.

What is the benefit of using Bitcoins instead of traditional currency to buy fine art?

There are a few.  First, vendors selling anything in Bitcoins can undercut traditional vendors if they choose – this is because the underlying economics of Bitcoin allow for very minimal transaction fees that are much less than traditional merchant solutions like VISA/MasterCard/PayPal.  So it is cheaper for sellers, and they can pass on cheaper prices to Bitcoin buyers.  Secondly, if people are holding Bitcoins it is more beneficial from a tax perspective for them to spend their Bitcoins instead of exchanging them back into the local currency to buy fine art or other items.  Our site gives them unique items to spend those Bitcoins on.

As a marketplace that utilises a system of exchange that exists well outside the mainstream, what type of investors/collectors will be most likely attracted to BitPremier?

We believe that adoption of Bitcoin will continue to grow in the coming months and years.  For now, a large portion of sellers will most likely be seeking to diversify their assets from art, real estate, jewelry, or other assets into Bitcoins.  This is the case with the current art listings.  The sellers would like to hold a portion of their investment portfolio in Bitcoins, and this is an efficient means to achieve that.  With the current market liquidity, buying $1MM in Bitcoins would likely be a market-moving event that would raise the basis of your purchase to an unknown level.

What is the future potential of the BitPremier marketplace with regards to the sale of fine art?

There is incredible potential from here.  The Bitcoin ecosystem is really in its infancy, and we believe it will grow exponentially from here.  This will open the market to endless opportunities, and as Bitcoin s appreciate, the Bitcoin community’s buying power will grow.  We plan to be the go-to Bitcoin luxury marketplace, and are well-positioned to fill that role.

 

image: LeRoy Neiman “Basketball Superstars” 1977

**Nicholas Forrest is a Sydney/London based art market analyst, art consultant and writer.  He is the founder of the Art Market Blog (artmarketblog.com) which offers independent commentaries as well as research and analysis on the current art market, and has recently been published in Fabrik magazine, Verve magazine, Visual Art Beat magazine, Australian Art Collector magazine, Art & Investment magazine and many others.  Nic has made several radio appearances (both nationally and internationally) as an art market expert and has received press from the likes of the New York Times, Conde Nast Portfolio and Times of London.

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  • Clyde Machine

    Speaking for myself, I can see a lot of underground independent music artists launching their works with a “we accept Bitcoin” sticker attached. (Metaphorically speaking of course.) My own works are online and offered for Bitcoin: http://clydemachine.bandcamp.com

    What’s really cool about it is that they’re actually seeing sales from the ease of financial transfer as well as the wide options for denominations. (No rules to how large or small the payment can be.)

    • Yumcoin

      If you’d like to accept Bitcoin for your work, check out Yumcoin: https://yumcoin.com

      It’s a platform for selling your digital goods that makes it as easy as sharing a link. We think it works great for independent musicians.

      • http://www.clydemachine.com/ Clyde Machine

        Thanks for the tip! That’s something I’ll consider.

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  • BitcoinStarter

    We just had Art4BIT raise some BTC funding on our site: https://bitcoinstarter.com/projects/111 There is a future to art and Bitcoins I believe. Good article.

  • Pingback: Could the Rise of a Bitcoin Art Market be Imminent? – artmarketblog.com | NewsBitcoin.com

  • Michael Savage

    This strikes me as a novelty, with illusory benefits and significant costs. Bitcoins don’t yet serve as a reliable store of value, given their volatility. Transaction costs on big-ticket items are already minimal – bank transfer rather than credit card. The anonymity of bitcoins makes them attractive for money launderers, so sellers accepting bitcoins need to do significant due diligence on their buyers – increasing transaction costs – or accept legal risk. I’d stay well clear for now.

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