A digital art collection previously owned by the collapsed cryptocurrency hedge fund Three Arrows Capital has brought in almost $11mn at Sotheby’s in New York, setting a new auction record for works sold as non-fungible tokens despite a broader downturn in demand for similar assets.
The 37 artworks, which bidders could pay for with cryptocurrency, included Dmitri Cherniak’s “Ringers #879”, known as “The Goose”. It sold for $6.2mn to enthusiast @punk6529, which the auction house said made it the second-most valuable work of generative art ever sold, behind another of Cherniak’s works.
The sale came weeks after Sotheby’s fetched $2.5mn for a smaller batch of NFTs owned by Three Arrows, which filed for bankruptcy in the US last July, after crypto exchange Deribit claimed it had failed to repay $80mn. The formerly Singapore-based fund owes more than $3bn to creditors.
Three Arrows had risen to prominence during the height of the crypto bull market that peaked in November 2021, borrowing large sums of money to make substantial bets on digital currency, before becoming a casualty of the sector’s spectacular implosion in the summer of 2022.
Some of the NFTs owned by Three Arrows were sold privately in recent weeks, bringing the total amount raised by Sotheby’s for the collection to almost $17mn, including fees. Thursday’s live auction attracted nearly 1,000 bids from 17 countries, the auction house said in a statement, with more than half of those participating under the age of 40.
The enthusiasm from collectors contrasts with a sharp decline in demand for NFTs in the broader market, which peaked in January 2022, when monthly sales volume topped $16bn, according to data from Chainalysis. Last month, total sales reached a mere $867mn by comparison.
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“The market changed drastically in terms of price [in the last year and a half],” said Michael Bouhanna, Sotheby’s head of digital art and NFTs.
But so-called generative art, which utilises algorithms, “carries some real legacy from” 1960s computer art, he added, and its importance was being acknowledged by discerning contemporary collectors.
“We are seeing really different categories in the NFT space — NFT doesn’t really describe [it all] very well,” Bouhanna said.
The buyer of “The Goose”, @punk6529, who won a three-way bidding war, said: “On-chain long form generative art is an act of faith by the artist and the minter. Once the algorithm is committed to the blockchain, nobody knows what outputs it will produce. ‘The Goose’ represents this more clearly than any generative NFT . . . I suspect its journey has just begun.”
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