Ethereum has fallen so much over the past two and a half years that it now accounts for just 1.5% of art assets.
The world computer that is trying to natively digitize banking and money currently has a market cap of just $26 billion, less than Snapchat.
While collectable art has a market cap of magnitudes more according to Masterworks, a platform that aims to increase access to art investments.
“Astonishingly, the aggregate market cap of cryptocurrencies is remarkably small,” they say before further adding:
“Comparatively, art collectors hold more than $1.7 trillion in art assets or roughly 6% of their global net worth and nearly 9 times the size of the entire crypto market.”
Bitcoin has just risen to $170 billion, making it 10% of art assets as an investment class, showing how the crypto field is still tiny even compared to frontier asset classes like art.
That’s despite the significant growth that bitcoin has experienced, as well as ethereum and other cryptos.
“Since 2010, contemporary art had an annual standard deviation in returns of 6% as compared to over 1700% for BTC,” they say.
And that’s despite the significant similarities between bitcoin and art with scarcity of course being one of them. In addition:
“Both cryptocurrencies and art tend to behave very differently when compared to financial assets (e.g., stocks, bonds, etc).
Over longer periods, both can be said to be weakly correlated assets in this respect.
Low correlations (typically below 0.5-0.6) mean returns between two assets do not tend to move in concert with one another.”
You’d therefore expect cryptos to take some more share of art investments because they are a lot easier to move.
And although both bitcoin and art works are of a global nature, you can’t really buy a shipping container from China with a Mona Lisa painting.
You could of course after much negotiation and evaluation work, but not as easily as checking bitcoin’s price on a global exchange and so sending it across the world in ten minutes.
Bitcoin moreover and ethereum are far more divisible and far more liquid than art.
You can try and chop up a painting into shares, but you’re not really giving a part of the painting, more an artificial legal right that can be renegaded upon.
While sending some sats or gweis is no different than sending a whole bitcoin or a thousand bitcoins.
On the other hand art of course has the beauty, which gives status and an alleviated feeling. Making it more immediately useful rather than primarily transitionally useful.
Yet that it has such a big difference in market cap is probably more due to it being an established investment field, rather than a new asset class as cryptos are due to their very recent invention.