Major players in the crypto community are betting big on digital art NFTs surpassing the physical art market.
According to a Sept. 21 tweet from Messari analyst Mason Nystrom, sales of non-fungible token (NFT) marketplace Rarible passed $5 million in September, with a volume of 5,309 of its RARI governance tokens traded. Messari reported that $1.5 million of this new volume came on a single day, on Sept. 14. In addition, the SuperRare NFT marketplace has “grown at an impressive rate” this year, according to Nystrom.
This activity has caught the attention of investors seeing the potential of NFTs, which can be used to give token holders ownership of digital art, collectible trading cards and more. Morgan Creek Digital co-founders Anthony Pompliano and Jason Williams have reportedly made a “big bet” by partnering with a number of digital artists.
“Similar to how Bitcoin is superior to gold in almost every way, digital art is superior to traditional art in almost every way also,” Pompliano said in his newsletter. “This transition to a digital art world is not a question of if it will happen, but rather when. I personally believe that the digital art market cap will grow to become larger than the physical art market cap.”
The Morgan Creek exec stated that the traditional art market had a market cap of roughly $65 billion for the last few years and outperformed the S&P 500 by over 180%. Pompliano said he was confident he would see a “6,000x increase” in the digital art market cap, which he estimated at currently less than $10 million.
The record $100,000 sale of a digital art piece on NFT marketplace Async Art supports Pompliano’s assertion, as does an undisclosed investment from crypto investment firm CoinFund into Rarible on Sept. 8. Rarible predicted that the entire NFT sector will see a 50% growth in capitalization to reach $315 million by the end of this year.
“Given the ease of buying and selling digital NFTs and the popular appeal, it’s only a matter of time before the digital art realm surpasses that of the physical,” said artist Darren Kleine.