Perhaps all finance is ritualized social quantification. Cryptofinance certainly is. NFTs, culturally and technologically an offshoot of cryptofinance, are art about finance, or rather the abstraction of art on the abstraction of this social ritual.
A portfolio of NFTs as part of an investment in art is, in a necessarily confusing way, financialized finance-as-art. The distinction vanishes, and why shouldn’t it? If the value of a stock is what people (and their software) think it is and so is the value of a piece of art, or even its nature as a piece of art, then perhaps there’s is something to gain in ignoring the difference and thinking about both things as variations of the same phenomenon.
But what about the spiritual, cognitive, aesthetic, social values of art? Those are outside the art-finance nexus, possibly to the benefit of both. This is not about that.
What this is about is the assetization of narratives. It’s always been the case that every asset is a bet on a certain view of the future: the existence of a mineral vein, the success of a company, the skill of a founder. What makes crypto unique is the scope and nature of this narrative. It’s a narrative not about the future of a specific company or even a sector of the economy, but about a fundamental shift in basic socio-economic mechanisms. It’s a form of Pascal’s wager, a prophecy so big that the clarity of the vision overrides any question of technical detail. “Crypto” as technology, toolset, community, and set of semiotic markers creates both this ambitious narrative and a sometimes rickety way to invest in it.
The art market as a market traditionally drives its prices from the same self-referential processes of opaquely shifting demand patterns manifesting deeper tectonic movements of massive wealth (much like, not coincidentally, London real estate prices). As any market in an hyperfinancialized global economy it faces the return-scale problem: prices in the art world can and do rise to sometimes questionable levels, but established artists are either too dead or too canny to produce a large enough number of pieces to absorb all potential investment, and the cultural process of validating new ones is, due to what might be called legacy reasons, necessarily slow.
The creation of NFTs provided a very profitable bridge between both worlds. They are art-coded crypto tokens and art pieces very in as much as about a narrative of massive new wealth and radically transformed socio-economic mechanisms. That’s a very compelling narrative to many of the people in either or both markets, a narrative of which the prices themselves are part of.
To say that prices in finance and art are whatever the market will pay for something and not always strongly coupled to the particulars of the thing is wisdom common to the point of cliche. NFTs are just the purest existing expression of this analogy, both halves refined to a point that makes abstract art and complex financial derivatives look like mediocre paintings of sailing boats and low-interest saving accounts.
The Metaverse is a newer but similar development, often with the same actors. There are vague sketches of technology and a rousing narrative, unappealing in detail but of staggering scope. It drives attention, and the money that follows attention, because nowadays nothing more prosaic could. It requires and, at least for now, rewards faith because the energy comes entirely from the narrative itself – one being currently being assetized at record speeds by a tech-art-finance nexus that, in good- or ill-faith, has learned the rules of this newest version of finance and art.
The likely next step in this nexus is the complementary move that follows the commercial explosion of new styles and media: the artistic institutionalization of NFTs and other crypto-adjacent, or rather crypto-significant art. We are already at the tail end of an explosive process of creation (“creativity” might be a different matter), one driven by huge prices in part because the money was already waiting for the art, and in part because the art is, and is about, the money. Maximizing its potential as a market will now require the same sort of structured gatekeeping that profitably structures the rest of the art market. Expect more and more organized criticism, curation, and reputation management of NFT pieces and artists, the development of sub-narratives and styles, heated debates, and conflicting tastes.
There is probably fun, and certainly profit, to be had there. The technical underpinnings of crypto-art, and its relative newness, makes it an interesting experimental field for new forms of criticism that are neither about printed and framed NFTs nor the pseudo-curadorship of algorithmic recommendation systems, but a conceptually more nuanced form of seeing and understanding art. At a bare minimum, there are books to write, expertise to stake a claim on, consulting fees to collect, and entire new businesses to build.
Just as the art world learned much, and very quickly, from finance, it would be profitable for those in the wilderness of new finance to understand the history and processes of the art world. They already do many of the same things, but it’s always a good idea to peek at the maps of those who have gone further before.