The posh world of buying and selling overpriced intangible bullshit “alternative assets” isn’t just for Hunter Biden’s art shows, it turns out. During the crypto boom, tons of “crypto bros” also wound up diving into items like global art, NFTs and Rolexes.
But now that the music is starting to slow on the economy, so also slows the luxury goods market.
Global art sales rocketed to $67.8 billion in 2022, according to the Washington Post, up 3% from the year prior. 2021 saw a 30% boost in art sales from their low in 2020, the report says. It’s amazing what $9 trillion in liquidity can do for the art market, isn’t it?
The art market had been driven by the U.S., WaPo notes, with Andy Warhol’s Shot Sage Blue Marilyn selling for $195 million and Leonardo Da Vinci’s Salvator Mundi selling for $450 million in 2017.
But this market started to cool off in late 2022, the report notes, citing “stalled demand for lower-end works” as a result of “fear of recession, sky-high inflation and rising interest rates”.
On top of that, younger participants in the luxury market in general are starting to curb their spending, with Burberry Group Plc and Gucci-owner Kering SA reporting that “aspirational buyers” (read: young idiots) are tightening their belts heading into 2023.
Nowhere is the mania slowing more than in NFTs, the report notes. The $2.9 billion in NFTs sold in 2021, up from just $20 million the year prior, has now started to collapse. “Art-related NFT sales roughly halved in 2022 from the year earlier,” WaPo reported.
And while young people continue to buy art, they are differentiated from the “crypto bros” because they have more than $1 million of assets, usually including real estate and private businesses.
And, as is the case with most markets, WaPo contends that with the U.S. market collapsing, “China now holds the key to transforming both art and luxury”:
Arts Economics notes that after the 2008 crisis, a booming market in China was one of the key factors behind the recovery, with sales rebounding in 2010. Already the signs there are promising. Art Basel Hong Kong last month was busy, indicating that there is significant pent-up demand for art. This adds to positive signals from brands including Prada SpA and Moncler SpA that luxury shoppers are back in force too. Analysts at Bernstein even noted that some Chinese fashionistas had begun to travel abroad again.
For sellers of creations by Balenciaga and Basquiat, Chinese shoppers unleashing another wave of revenge spending can’t come too soon.
Tyler Durden
Fri, 04/07/2023 – 05:15
