How NFTs Changed Our Understanding of Collectibles in the Post-Pandemic Market

NFTs have found their market, but the unique characteristics that dictate their value beg the question of whether they belong in the fine art or collectible market. How has the pandemic created an environment where the label of ‘collectible’ is no longer a value hampering detriment?

The pandemic has certainly shaped the collectible and fine art markets as we know them; trailblazing trends towards the digital and online as we collectively sat in front of our computer screens for over a year. Before COVID-19, collectibles were watches, coins, and art consisting of paintings, sculptures, and photography, yet now, collectibles are Pokémon cards and the art is NFTs that are sold on the Metaverse and traded for digital currency. Art has always been collectible by intention, but when have we seen the fine art world so focused on its inherent collectible nature? When have the lines between the collectible and fine art markets ever been so ambiguous?

Art by NFT artist Beeple depicting Elon Musk atop a seated "Doge." Courtesy of the artist.

If you consider an NFT more as a collectible than fine art, then their path towards prominence makes more sense than one would think, thanks to a few moves that took place prior to the pandemic. The collectible market’s rise in the commercial world can be attributed, in part, to the ownership change that occurred at Sotheby’s in June 2019, when Patrick Drahi purchased the auction house and immediately imposed a new identity on the brand.[1] On top of enhancing production quality for their in-person and online events, he embraced collectibles and raised their presence within his brand. 

Right before the pandemic, this timely move brought collectibles to the forefront of the luxury industry as well as helped to establish previously overlooked collectible markets in the auction house world. Major auction houses began advertising auctions for high-end sneakers[2], among other items that have previously been ignored by the sector. This trend among auction houses not only helped bring in massive amounts of revenue[3] but has also reinforced the en vogue nature of collecting to a younger generation of collectors.

Bored Ape Yacht Club, #4466. An example of the perplexing symbiosis of artistic and collectible value in the NFT market. Courtesy of FTX US.

When the pandemic hit, the initial speculation of a weakened art market proved to be true. Most markets suffered drop-offs due to government regulations and mandates that affected businesses deemed non-essential, including the art market. Another aspect was the lack of consumer faith in such a volatile luxury item in times of uncertainty. Auction houses put preemptive emphasis on collectibles and their entrance into digital art and NFTs during the pandemic helped set records in both categories. The infamous $69 million Beeple has already been etched into art history and overshadowed the staggering prices of collectibles including coins, sneakers, and trading cards were realising at the same time. Christie’s managed to sell Michael Jordan’s game-worn shoes for over $500,000 in 2020[4] while Sotheby’s sold Yeezys worn by Kanye during his infamous Grammy tirade for $1.8 million in a private sale in 2021.[5]

Michael Jordan’s game-worn, custom 1984 Nike Air Ship sneakers sold at Christie’s for a then-record of $500,000 in 2020. Courtesy of Christie’s.

The rise of the trading card market is perhaps the most surprising. It almost seems like a sociological byproduct of the pandemic, yet it also provides insight into the connections between NFTs and the current state of the collectibles market. With everyone stuck at home, people began digging up their cards. This, combined with the massive influence that social media had during and after the pandemic, led to an influx of collectors into a market that has an extremely low barrier to entry.[6] The educational element of social media platforms like Instagram and TikTok is fascinating, and trading cards are an excellent example of this as they have also allowed for the spreading of ideas, knowledge, and insight that the message boards of the previous generation’s early internet experience could not match. 

An example of a typical thumbnail you might see on the internet, this one from Packman on Youtube.

After trying to play the guitar again after 10 years, I realised the difference that social media, apps, and online communities had in helping me get back into playing consistently. The same can be said about my coin collecting by garnering 60-second education throughout the day. This has been happening for all types of collectibles and has gone into hyperdrive when everyone was locked down and stuck on the internet. These extreme circumstances perhaps led to the meteoric rise into popular culture that trading cards have experienced in the pandemic years. A month ago, Logan Paul wore a Pikachu card around his neck at his inaugural Wrestlemania appearance valued at over $5 million.[7]

These circumstances are eerily similar to the NFT market and how it has grown significantly. It follows the formula of online communities that are suddenly greeted by massively commercial success followed by the added cultural value. The parameters are similar too, with very little barrier to entry, a virtual education provided by online enthusiasts, and the idea of value exchanged through trading and collecting. The only true difference is the notion of art among NFTs that places them among the fine art world and rejects the idea that they are collectibles, even though their foray into the art market eerily resembles trends in the collectible market at that time.

Logan Paul wearing his $5 million Charizard Card during his Wrestlemania appearance in Dallas, Texas. Photo credit: Logan Paul.

The ambiguity is playing into the visions that the auction houses have for the future of the market. As the market has moved progressively more digital, the auction houses are proverbial one-stop shops for expensive things. While the volatility of art can be problematic for the bottom line, the stability of collectibles has benefited auction houses greatly. Perhaps the future of the market can experience a renaissance similar to the modern art phenomena of the 20th century where a plethora of movements and aesthetics became the norm.

We have arguably already seen this boom in the micro-chasm of the NFT market, as the line between highly valuable and practically worthless is almost unrepresentable. NFTs have also brought in ideas such as rarity, editions, and added perks[8] that have only disrupted the market even further, skewing it farther away from the traditional art world. NFTs have also brought about fractional ownership for traditional fine art that allows people to purchase parts of a painting,[9] adding a very collectible feel to owning part of a painting.

Bored Ape Yacht Club, #5198. Courtesy of FTX US.

Bored Ape Yacht Club, #8174. Courtesy of FTX US.

Bored Ape Yacht Club, #3499. Courtesy of FTX US.

The post-COVID-19 market has changed for the good and brought in radical changes not only to the auction houses but to the collector bases themselves. The accessibility of the collectible world, which has translated into the NFT world, is something that the traditional art market has never incorporated as a part of its brand, thereby desiring to create a markable difference between the fine art world and the collectible world. What we have learned from the pandemic and the strategic moves made by individuals such as Patrick Drahi is that collectibles are a more intangible part of our identity and desires than the market previously believed. The joy of the collectible is not only the objects themselves but the communities and information that you become part of and learn from along the way. These communities have never been stronger and this information has never been more readily available to even the most beginner of collectors. It’s exciting to see where the future could go for some of these items as we push towards the end of the decade because we are just realising the potential for many of the markets. Combine this with the increasingly rising inflation that generally pushes people to invest in more tangible assets, and the collectible market at very worst should be considered stable, if not untapped in terms of the potential for growth.

Ultimately, the beauty of collectibles is the ubiquitous nature that allows every race, gender, social class, and education to enjoy them on the most basic levels that much of the contemporary art scene arguably does not replicate. Next time you are able to visit your parents, ask them about where they put your old baseball cards, search YouTube to find some videos about your cards, and join a Discord server full of fellow baseball card enthusiasts. It truly is as simple as that.

References

[1] Dawkins, David. “Sotheby’s Bought by Billionaire Patrick Drahi in Surprise $3.7 Billion Deal.” Forbes. June 17, 2019. https://www.forbes.com/sites/daviddawkins/2019/06/17/sothebys-bought-by-billionaire-patrick-drahi-in-surprise-37-billion-deal/?sh=dea7e5a14f00.

[2] Renwick, Finlay. “Why Old School Auction Houses are Clamoring for Rare Trainers.” Esquire. June 4, 2020. https://www.esquire.com/uk/style/fashion/a32710648/sothebys-nike-air-jordan-auction-michael-jordan-the-last-dance-trainers/.

[3] Renwick. “Why Old School Auction Houses are Clamoring for Rare Trainers.” 

[4] “Christie’s Announces ‘Original Air: Michael Jordan Game-Worn and Player Exclusive Sneaker Rarities,’ July 2020.” Christie’s. July 16, 2020. https://www.christies.com/about-us/press-archive/details?PressReleaseID=9723&lid=1.

[5] “Kanye West “Grammy Worn” Nike Air Yeezy Sample.” Sothebys.com, 2013, www.sothebys.com/en/digital-catalogues/kanye-west-grammy-worn-nike-air-yeezy-sample.

[6] Statista Research Department. “Topic: Social Media Use during Coronavirus (COVID-19) Worldwide.” Statista, 8 Feb. 2022, www.statista.com/topics/7863/social-media-use-during-coronavirus-covid-19-worldwide/#topicHeader__wrapper.

‌[7] Sarah Do Couto, “Logan Paul Wears $5M Pokémon Card into WrestleMania Ring.” Global News, April 5, 2022. globalnews.ca/news/8736285/logan-paul-pokemon-card-wrestlemania-ring/.

[8] Bailey-Laurning, David, Gansen, Sandra, “Here Are the Top NFTs with Utility.” Supplain. January 31, 2022. https://supplain.io/news/top-nfts-with-utility

[9] “Bybit Learn | Explained: Fractional NFTs (F-NFTs) and How They Work.” Bybit Learn, 9 Feb. 2022, learn.bybit.com/nft/what-are-fractional-nfts/. Accessed 16 May 2022.

Wylie Geibel

Contributing Writer, MADE IN BED