The $1 billion auction: Will (art) history be written next week?

150 masterpieces from 500 years of art history

The example of Paul Allen shows that enthusiasm for technical innovations and a sense of art are by no means mutually exclusive. The Microsoft co-founder stood out not only for his intellect, but also for his tireless curiosity. Among other things, he was also an oceanographer, an accomplished musician, engaged in the sports sector and: an enthusiastic art collector who built up a collection of incomparable quality with his visionary perspective.

The auctions now planned under the name “Visionary” reflect the depth of Paul G. Allen's collection and feature a wide range of groundbreaking artists from a wide range of periods - from celebrated old masters of Baroque, impressionism and realism to pop art. The artists included in Paul Allen's extensive collection include Picasso, Paul Cezanne, Vincent van Gogh, Paul Gauguin, David Hockney, Jasper Johns, Roy Lichtenstein or Jackson Pollock. Each of the works of art offered for auction is a sensation in itself. But let's take a look at two highlights from “Visionary”:

So for example Paul Cezanne's “La Montagne Sainte-Victoire”, which, according to the auction house alone, is worth more than 100 million dollars. In this close-up of a mountain in southern France, the artist flattened the image to the point of abstraction by eliminating recognizable details and reducing them to an impression.

The work too “Small False Start” by US Painter Jasper Johns, which is estimated at up to 65 million dollars, is part of the collection. It is probably the artist's most famous painting and is considered a bridge between abstract expressionism and pop art. It shows explosions of color in red, blue, yellow, orange and gray, with the color names applied in a different color. For example, the word “Red” is written in orange or the word “White” is written in red. The tension between the visual and the verbal is a simple means that induces the viewer to engage with the image in more depth and had a significant influence on the development of conceptual art in the 1960s.

Auctions achieve record results

With millions worth of money spent on certain works of art, you might ask yourself whether this is the right time for record auctions. Because inflation, the impending recession and the energy crisis are not exactly creating a buying mood for most people. But the art market “ticks” differently and has a very low correlation with financial market developments.

This also explains the fact that a Sotherby's auction 2021/2022 has already reached almost the 1 billion dollar mark. The auction of the collection of the US couple Harry and Linda Macklowe raised a total of 922 million dollars. In 65 years, the New York real estate developer and his wife have assembled a legendary blue chip collection of contemporary art, including works by Rothko, Pollock, Giacometti and Twombly. On the occasion of the divorce, the spectacular works went under the hammer and achieved an overall result that surprised even experts.

The fact that collections are being auctioned off at top prices right now reflects the general Upswing of the art market Against: According to data from “Art Market Report”, which is produced annually by Art Basel and UBS, global sales on the art market rose above pre-pandemic levels as early as 2021. Sales by dealers and auction houses reached an estimated 65.1 billion dollars in the previous year, which is an increase of 29 percent compared to 2020 and even exceeds 64.1 billion dollars from the pre-crisis year of 2019.

In addition to art, collectors and investors are also very popular with vintage cars, watches and diamonds. For example, as part of the Monterey Car Week Classic cars sold at highest bids in August 2022. The most expensive classic car this time was a Ferrari 410 Sport Spider, which changed hands for over 22 million dollars.

Inflation protection collector investments?

Of course, not every investor has millions “on the high edge.” But even with low Investors can secure attractive return opportunities thanks to digital tangible assets that are securely represented on the blockchain in the form of tokens. Because of record inflation and the still relatively low interest rates for overnight or fixed-term deposit accounts, there is no way around tangible assets to build up wealth. In addition to real estate (shares), art and collectibles are also ideal as a portfolio addition. On the one hand, due to the market growth described above, and on the other hand, because collectibles have a high appeal even in times of crisis due to their uniqueness and the associated prestige value.

The special thing about digital assets is that investors do not have to have enormous assets, industry knowledge, expert contacts or storage options and also minimize their investment risk. Because no one can predict how the value of a single painting, for example, will develop. That is why with art - as with any other form of investment - it is important to invest in several assets. It is precisely this diversification that is possible with digital tangible asset tokens, which let you share in the return opportunities of an object just like an owner.