NFTs Promised to Revolutionize the Art World—but Are Galleries on Board?

Steven Sacks, who runs bitforms gallery, has been selling media art for the last 20 years. But in 2021, everything changed. The NFT boom, he said, is “probably the most disruptive thing that’s happened to my gallery—both positive and negative.” Suddenly, the previously small audience for buying digital art became exponentially larger: “It opened up the market to millions of people who now look at a digital piece of art as legitimate,” he said.

It’s been impossible to miss the growth in sales of NFTs (non-fungible tokens). The exorbitant sums paid for several high-profile, blockchain-authenticated artworks has made them an unavoidable talking point. Now that NFTs are frequently used as certificates of ownership for different types of media, from profile pic (PFP) projects like Bored Ape Yacht Club, to performative gestures like Cassils’s cans of poop based on famous artists’ diets, the traditional art-world distinction between artwork and collectible has seemed, at times, under threat. NFT marketplaces, after all, are far more inclusive of newcomers than the art establishment, and there are plenty of platforms where artists are able to connect with buyers directly.

This has enabled NFT artists to succeed outside the gallery structure. Take Beeple, for example, whose infamous Everydays: The First 5000 Days (2021), a digital collage, sold as an NFT at Christie’s for $69.3 million in March 2021. This month, he opened and sold out his first gallery show (reportedly the first gallery opening he has ever attended) at Jack Hanley Gallery. With a year of NFTs behind us, how have galleries responded to this surge in interest for blockchain-certified work?

Artsy recently surveyed its gallery partners about their experience with cryptocurrency and NFTs, and found that just over a tenth of the 873 respondents said that they had sold NFTs in the last year. Artsy’s survey also suggests that the value of most NFTs sold in galleries may be more modest than the headlines suggest: Of those that sold NFTs, only 5% of galleries said the works’ prices totaled over $250,000. The majority (51%) of galleries sold less than $5,000 worth of NFTs.

Among galleries I spoke to on the topic, there was a broad agreement: There are traditional art collectors, and then there are NFT collectors, and each group has entirely different expectations. Many galleries might not come into contact with NFT aficionados (67% of galleries in Artsy’s survey said that their clients had not even asked about collecting NFTs), but there are several that are making concerted efforts to bridge the gap.

Unit London’s Joe Kennedy, who co-founded the gallery with Jonny Burt in 2013 without a built-in collector base, had previously used social media, such as Instagram, to connect with buyers. But the boom in NFTs presented a new community: younger, tech-literate clients ready to engage with the gallery. Kennedy was attracted to the open, disruptive nature of the NFT market: “All the issues of accessibility in the art world stem from a lack of transparency. And it creates a very inequitable marketplace for artists, and sometimes for collectors.” His approach resulted in a new, curated NFT-selling platform, Institut. It debuted with a show of almost 100 artists, curated by Kenny Schachter, including “NFT-native” artists like Olive Allen, as well as more established art world names, like Jake Chapman. As the venture develops, the gallery will be working further with artists that are already established in the NFT world, he explained, such as Tyler Hobbs and IX Shells, who both featured in Institut’s booth at Art Dubai 2022.

Institut is reaching out to the crypto community through platforms normally eschewed by the art world—notably Twitter and Discord. On the latter, Institut has a private channel for collectors and artists, with over 2,000 members.

Other galleries are taking a different approach to bridging the gap. Last year, Johann König founded misa.art, an NFT marketplace that caters to a younger set of collectors than his blue-chip gallery König Galerie usually works with. Indeed, the gallery itself still sells NFTs on platforms like Opensea, where Refik Anadol’s work Machine Hallucinations – Nature Dreams : AI Data Sculpture (2021), exhibited at the gallery’s Berlin location in late 2021, sold for just over 300 ETH (around $870,000).

Misa, which accepts both crypto and credit card payments, and offers technical help via a Discord channel, is aimed at individuals who need no hand-holding in purchasing NFTs. “The good thing about Misa is that it provides the visitor with so much information that they can make an educated decision,” said Johann König. By contrast, König characterized the gallery itself as being about “serving artists.” He added, “We focus a lot on placing work in museums. A platform can’t do that, but for young artists, young collectors, it works.”

Pace, meanwhile, set up an entirely new platform, Pace Verso, late last year, which will offer monthly drops from artists in and outside of its program (Lucas Samaras and Glenn Kaino have already been featured). Christiana Ine-Kimba Boyle, Pace’s director of online sales, sees crypto-native and traditional collectors becoming more unified in the future. While the gallery has been helping (or “hand-holding”) its regular collectors through the intricacies of purchasing NFTs, there was also movement in the other direction, she explained: “Verso gives us an opportunity to engage with collectors from the crypto side that we would like to convert into more traditional art collectors. In theory, it’s no different from client development, trying to learn exactly what they like and what they may want.” One collector in particular, she explained, has bought an NFT at every one of Pace’s drops so far, and is now interested in other artists on its roster, like Adam Pendleton and William Monk.

At German gallery Galerie Nagel Draxler (which, like Unit London, tapped crypto-art enthusiast Kenny Schachter to inaugurate their NFT program), only a few NFT buyers had been converted to the gallery’s regular programming. “It’s not common, but it’s growing,” said gallery co-founder Saskia Draxler, noting that there was interest from these buyers in artists like Christine Wang and Martin Kippenberger.

Galerie Nagel Draxler shows NFT works in a dedicated “crypto kiosk” that, beginning this year, takes up one of the gallery’s two exhibition spaces in Berlin, and has also popped up in booths at several art fairs. This IRL space creates interactions that Draxler sees as vital to bridging the gap between the art and crypto communities. For example, at Art Cologne last fall, the gallery sold a Schachter work to a collector who usually collects Joseph Beuys and Jonathan Meese, she said, while another visitor, a woman in her seventies, compared the work to those of Nam June Paik. “These are not tech guys,” Draxler emphasized.

As for the future of NFTs in the art world, Draxler was also adamant that there would be no future without clean blockchain technology, referring to energy-guzzling proof-of-work technology that some blockchains currently run on. “If this is not resolved, it doesn’t have a future,” she said.

In contrast to building an NFT platform, a less intensive entry point for galleries courting crypto collectors might be the acceptance of cryptocurrency as a payment method for traditional artworks. In Artsy’s survey, 30% of respondents said they planned to take this step in the next few years. For crypto-rich collectors who have a vested interest in keeping their gains out of traditional, or fiat, currency, this could make purchasing art a much more attractive prospect.

Or could it? Rachel Lehmann, co-founder of Lehmann Maupin, explained that the gallery started accepting crypto payments in summer 2021. And yet, until now, this option has been selected by only a handful of clients, she said. The gallery hasn’t seen an influx of newly interested crypto-enthusiastic art buyers. “Not yet,” she said.