High-net-worth millennials are disrupting the art market with crypto

• Ultrawealthy millennials are digitally reshaping the art market, Bloomberg's Andrea Felsted reported.
• They're more likely to buy online and invest in crypto art, like Beeple's NFT "Everydays: the First 5000 Days."
• Their purchases helped a declining art market during the pandemic.

Ultrawealthy millennials are spending big on art, and they're digitalizing the process while doing so.

These young and tech-savvy buyers have helped save the art market during pandemic, Bloomberg's Andrea Felsted reported. Thirty percent of high-net-worth millennial collectors spent a minimum of $1 million last year, compared to 17% of boomer collectors, she wrote, citing a report by UBS and Art Basel. The art market shrank by 22% in 2020 to $50.1 billion in sales, per the report, the lowest level since the Great Recession.

As it shifted to online selling during the pandemic, Felsted wrote, it began to attract those who spend most of their time on the internet - millennials, who are largely interested in crypto art.

Consider Beeple's "Everydays: the First 5000 Days," a collage of images that sold for $69.3 million, the third-highest price paid at auction for a work by a living artist, according to The Washington Post. Not even a Titian or a Raphael has sold for that much. The artwork is an NFT (non-fungible token), meaning that rather than a painting one hangs on a wall, it's a digital file that's tradable by blockchain.

More than half (58%) of bidders for the piece were millennials, Christie's said. And 60% of bids on Christie's NFTs overall have been made by those under age 40.

Millennials are running the art show

Even before the pandemic, wealthy millennials were more willing to buy art online than other generations.

According to a 2019 report by The Art Market, millennials spent $100,000 or more buying a piece of artwork online, and 4% spent $1 million doing so. Instagram, in particular, had become a tool for both emerging artists and millennial collectors, Adweek reported.

The trend was only exacerbated during 2020, as wealthy millennials leaned into arts and culture investments during quarantine.

"More people have become interested in bringing art into their lives," Artsy CEO Mike Steib recently told Insider. He said Artsy, an online art marketplace, sold more art than ever last year to collectors. Its e-commerce sales skyrocketed 150% year-over-year via its buy now feature as the in-person art world shut down, according to Artsy data shown to Insider.

Millennial art investors are also more strategic with high-end art purchases than previous generations were, seeing them as a way to make money. "Millennials are more likely than other generations to see art as a financial asset and as part of a comprehensive wealth-building strategy," wrote Amelia Kennedy of the Art Market Guru.

Many are focused on "art-flipping," aiming to quickly resell a piece after buying in hopes of making a profit. But some are also focused on curating their collection, she said, motivated by a desire for personal fulfillment when it comes to collecting art.

Ironically, millennials buying art online may be seeking to dispel a sense of ennui brought on by technology's increasingly central role in their lives. As Alexander Gilkes, founder of online art platform Paddle8, who told W Magazine, "Our generation has become somewhat stripped of identity by the homogenizing effect of technology. So, more than ever, people want to project their own individuality. What you collect is the ultimate impartation of who you are."