Art has proven to be one of the most solid investments over the past decade. With the value of the art market outpacing the S&P, a growing number of investors have looked to secure their assets with art.
The growing amount of global wealth in the last decade has enabled more investors to break into this once-exclusive market. Additionally, blockchain technology, such as Artchain, have now created a decentralized form of art investment that offers powerful benefits. These benefits have revolutionized the art market and are now changing the way investors see the market. Those looking to start investing in art on their own would benefit from understanding just how these benefits affect their investment strategies.
The truth is that for investors, there’s never been a better time to start securing assets with timeless pieces of art. Below, we’ll explain the changing investment landscape of the art market, as well as discuss how blockchain technology increases investment opportunities. Then, we’ll offer some proven-effective tips that can help anyone get started making proper art investments.
Why Invest in Art?
The reason why a growing number of individuals are choosing to secure their assets with art is clear: the value of timeless pieces continues to rise.
A multi-billion dollar venture, the art market has far outpaced other investment ventures over the past five decades. This includes the S&P, real estate, and even gold.
This suggests that those who wish to secure their assets can better do so by investing in art.
However, to say that investing in the art market hasn’t been without its own share of problems would be remiss. Fortunately, as we will see, the introduction of blockchain into the art market has helped investors tackle a number of pressing issues.
Consider the following challenges and barriers that some investors have found while investing in art. Then, join us as we take a look at how Artchain’s blockchain technology encourages further investment in the market by reducing these problems.
Barriers to Investment
Traditional investment strategies have posed problems for a number of reasons. Understanding these issues proves important to understanding the effect of blockchain technology in the field of art investment.
These challenges include the following.
· High Entry Barriers
In the traditional sense, art has proven to beneficial for many investors — there’s just been one catch.
Those who reap the most benefits from art investment are those who can afford to buy timeless pieces. And these works of art typically come with a pretty high price tag.
For this reason, traditional art investment usually requires one to have significant assets already to receive a significant return. To put it into perspective, the price of some classic pieces can range in the tens to even the hundreds of millions of dollars.
With this in mind, it’s not difficult to see how some could consider art investment beneficial only for a wealthy few.
In the past, the only alternative moderate-income investors had was to purchase a work of art and hope that it would gain significant value in the future. This form of high-risk investment often didn’t come with a high return.
As we will see, the introduction of blockchain technology fundamentally changes the state of art investment. With Artchain leading the way, new-age technology currently looks to level the investment playing field by democratizing the investment process.
· Possibility of Fraud
The possibility of buying forged artwork remains an important consideration for investors at all levels. High-end investors, in particular, must take extra precautions to safeguard against purchasing a forged piece of art.
The potential of fraud creates another barrier for some looking to invest in the art market. Though the value of timeless art is steadily on the rise, the value of fraudulent art is often next-to-nothing.
And for individuals who purchase fraudulent art, the costs can get even more extreme. In addition to the cost of having work evaluated for authenticity, legal fees spent trying to recoup lost funds can prove costly — and there’s no guarantee investors will recover their assets.
With some high-end pieces selling for hundreds of millions of dollars, art fraud can put a serious dent in an investor’s wallet.
And it can keep potential investors keep their cash in their bank accounts.
Fortunately, as we will see, new blockchain technology works to eradicate this underground black art market.
· Delicate Nature of Art
Art investments have one final risk — but it’s a substantial one.
Unlike other investments, art requires that a certain piece of work remain in a certain condition. This means that investors must take extra care to preserve the condition of their pieces — or risk losing their investments.
This can prove quite challenging, with even the slightest of scratches turning multi-million-dollar investments into almost nothing. Serious damage, such as that generated from water or a fire, can further decrease the value of art investments.
Because of this, many find that they must spend more money protecting their art investments. If done well, this can result in dramatic increases in the value of art.
Finally, it’s worth mentioning that the value of art can be a barrier in and of itself. That’s because unlike other forms of financial investment, art won’t bring any real boost financially until its sold.
In other words, a piece of art may be worth $50 million, but investors won’t be able to cash in on this until the work is sold. Additionally, there’s no guarantee they’ll be able to sell it for the price they want, making it difficult to pinpoint exactly what value art can bring to an investor.
Because of this, investors will be out the value of the piece until they decide to sell it. Or, more accurately, until someone decides to buy it. And though the market’s history predicts that the value of these pieces will continue to rise, it must be noted that there’s no guarantee the final piece will net as much as an investor pays for it.
With this in mind, let’s examine how new blockchain technology works to revolutionize the art market and address some of these issues. Then, we’ll take a closer look at the investment options available to those looking to break into the market.
How Blockchain Revolutionizes the Art Market
The introduction of blockchain technology into the art market fundamentally changes the investment landscape. Artchain, one of the most innovative blockchain technologies in the field, boasts a number of benefits.
Artchain alters the market through a process known as asset tokenization. This fundamentally undermines traditional power structures in the market, providing for greater investment opportunities.
Importantly, Artchain’s innovative platforms work to reduce some of the problems facing new investors in the market. This can be seen in the following ways:
· It Creates a Digital Tamper-Proof Seal and Inalterable Ledger
Using blockchain technology, Artchain creates a digital ledger that makes it virtually impossible to create fraudulent art.
With its unique ArtDNA and fingerprinting technology, Artchain allows for artists, galleries, and investors to verify the authenticity of their artwork. Generated data can be accessed through the Artchain app, giving investors the ability to immediately tell the authenticity of a work of art.
Importantly, because this ledger cannot be altered, Artchain significantly reduces the viability of the fraudulent art market, protecting investments.
Established and emerging artists alike can also make use of this game-changing technology to secure a one-of-a-kind digital identity for their artwork. By doing so, they can definitively show and protect their ownership of a certain piece of artwork.
· It Allows for Investors to Buy Shares in Art
As noted, traditional barriers for investors often prove quite high due to the luxury price of timeliness artwork.
Through the process of asset tokenization, Artchain democratizes the market and decentralizes investment opportunities away from just an elite wealthy class of individuals.
In this way, Artchain opens the market to a growing number of investors. The process of asset tokenization allows individuals to buy shares of a certain piece of art — including timeless classics. These shares can be traded with Artcoin, Artchain’s powerful new digital currency.
Additionally, Artchain also allows for innovative crowdfunding opportunities. Currently, this crowdfunding is focused on the repatriation of artwork back to their countries of origin.
Art Investment Tips
Because of this, there’s never been a better time to invest in the art market. With values soaring and the number of investment opportunities increasing, now’s the time to make your foray into the art world.
That being said, it’s important that potential investors keep the following information in mind.
1. Consider Investing in Different Kinds of Art
Not all art is the same, so you shouldn’t treat it that way.
Importantly, when making your investments, be aware of the different benefits of choosing between more classical and more contemporary art.
As you may imagine, the value of classical art is quite high and rises at a relatively steady rate. Additionally, the risk of buying one of these pieces proves to be relatively lower.
On the other hand, more contemporary pieces come with a higher risk and greater potential returns. Generally speaking, these pieces don’t require as significant of an investment, but there’s a catch. You can never fully predict the ROI on newer pieces. However, because they can often be purchased for cheaper and have the potential to sell very high, they can prove quite valuable.
In the end, a diverse art investment portfolio can help better secure one’s financial assets.
2. Take Advantage of New Opportunities
When making your art investments, be sure that you take advantage of new opportunities.
And, yes — this means jumping on the Artchain blockchain train.
By using Artchain, you’ll have access to all of its powerful benefits — most importantly its asset tokenization. Through Artchain, you can gain ownership in some of the world’s most famous and timeless pieces of art.
As blockchain and crypto technology continues to grow, the influence of Artchain’s asset tokenization looks to become an increasingly important factor in the art market.
This can be seen from the fact that Artchain does more than provide new ways to invest in art. It’s decentralized platform also includes access to important services, such as appraisals and legal professionals.
By taking advantage of the new blockchain movement early, investors can capitalize on what looks to be a growing trend.
3. Research Before You Buy
Finally, those looking to make the most out of their art investments should do research before they buy. Consider looking into historical market trends to get a feel for which artwork best gains value.
This means knowing which artists are in high demand. Who has work featured in museums and galleries or in a wealthy individual’s private collection?
Knowing the answers to these questions can help you select art that offers the best return on your investment. And remember, with Artchain’s asset tokenization gaining ground, soon even some of the most timeless pieces can be part of your own private collection.
The Bottom Line
Art investment provides one of the most powerful avenues for securing one’s assets.
However, with new technology changing the face of art investment as we know it, it’s important to adapt to a new investment landscape.
This new-age version of art investment comes with fewer risks, as blockchain technology looks to undermine the art black market. Additionally, its decentralization of investment through the development of Artcoin asset tokenization looks to revolutionize the way investors deal with art by offering even moderate-income investors the opportunity to own stock in timeless classics.
By adapting to the technological advances that are fundamentally altering art investment, individuals can better capitalize on new opportunities to protect their assets.
As you start your own foray into art investment, keep the above information in mind. Don’t miss out on your opportunity to take advantage of one of the most reliable forms of investment in the world. With the traditional risks associated with art investment falling, there’s never been a better time to start securing your finances with art.
Additionally, consider capitalizing on growing investment opportunities with Artchain’s new blockchain technology.