Sotheby’s announced recently that it is embracing cryptocurrencies. It explained that, in an upcoming auction of Banksy’s “Love is in The Air,” bidders can be prepared to use their digital assets in order to win, with both Bitcoin (BTC) and Ether (ETH) to be accepted. This marks another example of cryptocurrency’s continued acceptance as an alternative to fiat. Banksy’s “Love is in The Air” is one of the best-known works by the anonymous British street artist. The auction is set for May 12, and Stewart said bidding is estimated between $3 million to $5 million.
This will be the first time that a major auction house accepts BTC and ETH, or any other crypto, as payment for a physical piece of art, although US dollars will also be accepted. Appearing on CNBC’s “Squawk Box, Sotheby’s CEO Charles Stewart asserted, “What better combination to introduce crypto than an iconic Banksy painting.” The auction house’s entrance into the world of digital assets is being facilitated through a partnership with crypto trading platform Coinbase. It follows Sotheby’s first taste of crypto last month, when it sold nonfungible tokens (NFT) created by the digital artist Pak. That auction, which included a few other items, finally went for a combined $17 million.
In its three-day sale of Pak’s NFTs, Sotheby’s received interest from over 3,000 buyers. The collection, in total, sold for $16.8 million and Stewart says, “We are definitely seeing a large — and largely new — audience from a Sotheby’s perspective.” Sotheby’s isn’t the first auction house to get involved with NFTs. That title goes to Christie’s, which became the first in March. It offered work from digital artist Beeple that sold for nearly $70 million, but Christie’s only accepted ETH as payment for that auction.
Stewart was asked what will happen if the auction winner pays in BTC or ETH and if Sotheby’s would convert the digital currency to fiat or hold it. He responded, “We have an agreement with the owner of the painting, the consigner of the painting, so that will ultimately be up to them. Part of the partnership with Coinbase gives us not only the ability to process the payment, but that possibility [of converting it], as well.”
BTC is, and has been since its inception, the world’s largest crypto asset by market value, now at slightly more than $1 trillion as of May 4, according to CoinMarketCap.com. ETH, which runs on the Ethereum blockchain, is second, with a market value of almost $400 billion.
Institutional interest in crypto is on the rise. Mastercard announced earlier this year that it is planning on providing support for certain digital currencies on its platform and Morgan Stanley and Goldman Sachs have both begun to target crypto through their respective wealth management solutions. Other companies, including Tesla and Square, have bought BTC this year to hold on their balance sheets and Tesla also began to accept BTC for the purchase of its electric vehicles.