According to a study by Hiscox insurer, most buyers of digital works are primarily interested in return on investment.
Since last year, NFTs have been particularly present in the art world. However, according to a study by Hiscox insurance, buyers are not motivated by the artistic quality of digital works. 82% of them said their purchase was more for money than art. Furthermore, 95% of those who spent $25,000 in the last 12 months cited ROI as the main reason for purchasing NFTs. However, this priority concerns men more than women.
While 96% of men are investment motivated, only 58% have purchased an NFT because of their passion for digital art. On the women’s side, 67% have privileged the return on investment compared to 76% of having made their purchase in relation to their passion for art, in particular for digital art. Furthermore, if this market is dominated by men, more women are likely to buy NFTs this year: 27% of them said they would buy one in the next 12 months. The gap with men would thus be reduced given that 28% of them have indicated their intention to buy an NFT this year.
Between the art market and the NFT market
When it comes to spending, of all shoppers surveyed, 35% said they spent less than $1,000 on their NFT collection. On the other hand, 37% of them say they have spent more than $5,000 so far. The study also shows that the art and NFT markets are starting to come together: “There are signs of a growing convergence between the traditional art market and parts of the NFT market”Hiscox says in his report. According to the insurer, more than a quarter of buyers surveyed are likely to buy an NFT in the next 12 months.
There are also growing signs of convergence between traditional art and online art markets, in particular, with nearly two-thirds of buyers purchasing works or collectibles online. “The majority of art buyers (84%) now believe that the digital shift of the art market will be permanent”Hiscox explains. In addition, online art sales are constantly increasing: from 4.82 billion dollars in 2019, they reached 13.5 billion dollars according to the insurer.
This online growth is also evident for auction houses. Heritage Auctions, for example, grew 79% last year, with $903 million in online sales. Internet sales at Phillips and Christie’s increased 70% and 41% respectively in 2021. These auction houses have also capitalized on the NFT craze to start offering them. However, for Hiscox, if online art sales are now an integral part of the art market, thus showing the maturity of this market, this is not the case with NFTs. “It’s still a speculative market, so we can expect a lot more ups and downs”explained Robert Read, Hiscox’s head of art and private clients.