crypto g35fffbe19 1920Cryptocurrency has long been pitted against (and compared to) fiat money – and, in many ways, it’s easy to see why. Bitcoin and the thousands of other tokens created since have tried to fix perceived problems with the dollar, including steep cross-border fees, central control, and surveillance. Of course, this isn’t without its downsides, as crypto is easily one of the most volatile assets money can buy.
Cryptopunks
Due to the differences between crypto and fiat, different industries have their own individual opinions about the two concepts. Banks and governments are, naturally, quite fond of paper and plastic, while companies that seek to attract international customers tend to favor crypto. Then, there are those institutions that sit somewhere in the middle, and simply seek to provide as many payment solutions as possible.
Falling into the latter category are entertainment sites like casinos. A regularly updated list of gaming sites from BonusFinder notes that the ArcaneBet website accepts Bitcoin, in addition to more traditional payment processors such as MasterCard and Visa. As one of only a few casinos that accept cryptocurrency in places like New Zealand, the simple act of accepting Bitcoin has given it privileged access to crypto users on the other side of the world
Similarly, the art world is a place where fiat and crypto frequently collide, largely due to the fact that paintings and sculptures are considered assets in their own right. The surge in the popularity of NFTs has also forged new connections between art and blockchain concepts, with the metaverse auction house at Sotheby’s selling an NFT Cryptopunk for $11.7 million in 2021 – and a Bored Ape for $3.4 million.
“Rich Millennials”
On a similar note, Maecenas, a blockchain-based marketplace, lets art moguls purchase “fractional interests” in pieces of artwork, including examples from Monet and Warhol. The idea is that, as a painting increases in price, partial owners are given a return on their investment. The website claims that it accrued returns of 10.6% in 2018, a figure it compares to the -5.1% of the S&P 500. The caveat is that purchases are made in dollars.
The fiat world also recommends investments in fine art. An article from Moneywise claims that “rich millennials” only have 25% of their portfolio in stocks and bonds, which is a sea change in perspective compared to those over 40 (55% in stocks). The rest of millennials’ wealth is going into alternative options such as real estate, private equity funds, and artwork. Art has outperformed the S&P for 26 years.
What might sound a little strange is that economists like Peter Schiff recommend avoiding cryptocurrency and, by association, the blockchain, in art investments altogether. However, it’s worth noting that Schiff is one of the more traditional money managers out there, with assets in gold, mining, and banking, among other things. As previous examples seem to suggest, artwork based in and around the blockchain, like NFTs, can provide significant returns.
Overall, while crypto’s volatility can prove problematic in investments, the blockchain’s role in the art world is only just being explored.
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