Magnus Resch has been called many things: an art collector, a storyteller and at least once, by CNN, “the world’s leading art market economist.” He has run galleries, taught at the Ivy League and attempted the often opaque world of art collecting.
In his new book ‘How to Collect Art’, which will be published by Phaidon in February, Resch tries to give an objective answer to the very subjective question of which works of art are suitable for me? Beyond the mantra of “buy what you like,” Resch aims to provide a systemic approach to actually making a profit through collecting.
Some of the advice is obvious, such as researching and classifying the artists, galleries, art fairs, auction houses and rival collectors who create the market. Other lessons can only be learned by sifting through mountains of data or making personal connections with artists and curators.
It turns out that it’s easy to overpay for work in an industry that can extract value from a scribble if you scribble it the right way. the right way. Nowhere is this more evident than in the world of non-fungible tokens (NFTs), which is dominated by cartoon characters (usually animals) intended to be used as avatars on social media.
While Resch doesn’t see many NFT projects, rocked by the market downturn, rebounding, he does believe that the technology itself will profoundly reshape the way the art market economy functions. “[I]Information about provenance will become clearer and more accessible, eliminating much of the historical mystique that the art industry has to some extent fostered,” he writes.
That’s important when you consider some of Resch’s previous research, which analyzed sales information from nearly half a million artists around the world. This revealed that there is a “network of interconnected galleries and museums” that essentially determines whether an artist is successful in their life. NFTs help by allowing artists to form closer relationships with collectors, breaking down barriers and making it easier for interested collectors to enter the market.
Also see: Magnus Resch — The art world underestimates the power of NFTs | Opinion
“The opacity of the art market benefits a small elite of collectors, gallerists and artists, but makes it harder for most artists and art lovers to connect,” he wrote.
CoinDesk spoke to Resch about the biggest lessons for people who want to collect art, how new technologies like blockchain are changing the practice, and why he thinks the biggest problem in today’s art scene is a lack of buyers. The interview has been lightly edited and condensed.
Do you expect the NFT market to recover? And if so, in what ways – will this be driven by the launch of new projects or is there hope for NFTs that have fallen to $0?
I expect most NFTs will maintain their current status, which is often significantly lower than at the peak of their hype. Historically, digital art has not played a significant role in the art market and is unlikely to surpass paintings as the main medium dominating the market. Nevertheless, five to ten digital artists, such as Refik Anadol, will remain relevant as they have successfully integrated into the traditional art market and its institutions.
What are the key insights your book offers to aspiring art collectors?
It’s twofold: my book helps you identify artists that match your preferences. For example, if you are buying for investment reasons, I provide advice on how to identify artists with investment potential. Secondly, it offers insight into how the mysterious art market really works, guiding you which galleries to buy from, which curators to follow, which fairs to visit – so you never overpay. In essence, the goal is to transform you into an informed and discerning buyer.
How do you experience the current obstacles facing the art market?
The art market has been struggling with a shortage of new buyers for some time now. Despite the fact that the global number of millionaires has doubled in the past decade and the number of visitors to art events has risen sharply, the value of the art market has remained stable. This disparity underlines a conversion problem, as the newly affluent do not transition seamlessly into art buyers. I believe that a combination of education, entertainment and transparency can play a crucial role in converting more art lovers into active buyers. My new book is a contribution to this goal, and I have observed similar initiatives emerging from galleries, museums and auction houses. An increase in the number of buyers is crucial to supporting the efforts of artists, gallerists, consultants and museums in the art world.
What lessons can the art market learn from the NFT hype in 2021, and what lasting effects will remain?
The three most important points are: First, artists have the ability to build their own following and serve these buyers. Second, a larger market with increased liquidity is created through price transparency, verifiable provenance and low transaction costs. Third, traditional art institutions still retain their value and will not disappear.
Similarly, what won’t be replicated by the NFT space after the market collapse? (i.e. lessons learned?)
Being an artist is a challenge. Lasting value is created especially when works are exhibited in renowned institutions. The physical presence is still important for digital art. To succeed as a digital artist, it still needs the approval and support of established traditional institutions.
Where do you anticipate the trajectory of the art market, and what significance do NFTs have in shaping it?
The introduction of blockchain technology and the different ways to use it has the potential to change the art market in ways that would not otherwise be possible. The convergence of digital art, cryptocurrency and blockchain technology will create a profound structural shift in the art ecosystem. Collectors will not buy if a work is not registered on the blockchain. Artists will exercise greater control over their work and earn royalties from resale. More collectors will populate a transparent market. And the art market will become more regulated – for the better. This won’t happen immediately, and initially other luxury industries will need to adopt this. The art market usually follows rather than takes the lead.
The art market is rife with money laundering. Do you expect the same to metastasize in NFTs?
It is important to dispel this misconception: although criminal elements can occur, as in any other sector, it is crucial to recognize that such cases are not representative of the entire art market. Cases of money laundering are present in several sectors, and the art market is not uniquely susceptible to this problem. Furthermore, these events mainly affect the top end of the market, which affects less than 0.1% of all exhibiting artists.
Any personal favorite artists working with NFTs?
Kevin Abosch, operator, Refik Anadol, Claudia Hart, Vera Molnár, Sasha Stiles, IX Shells
Also see: What you own when you own an NFTShould ‘crypto art’ be considered a uniform category? Different from other visual arts?
Certainly not. When photography and video emerged on the art market in the past, they faced challenges in being recognized as part of the traditional art landscape. Likewise, digital art is poised to play a more substantial role in the future, and there is hope that it will gain greater representation in museums and established art institutions. The Buffalo AKG Art Museum, for example, is at the forefront of this movement. Distinguishing ‘crypto art’ from ‘visual art’ could spark an unnecessary debate about the definition of crypto art. In my perspective it’s just art.