The saying “beauty lies in the eyes of the beholder” is especially true for art, as well as crypto art. Before looking into the various parameters that can influence the value of a work, it is important to state that the most important factor for collecting art is to enjoy a given piece. The connection between a collector and a work will be its most determining factor, complemented by a slew of historical, social, and economical factors.
One crypto art collector may be drawn to AI-generated landscapes, while another might favor photo-realistic 3D pieces. To collect crypto art is to purchase a piece that you will enjoy every day, even if its market value drops significantly.
Now, although personal value should be the determining motive behind a purchase, there are multiple other factors that should be considered when trying to find the fair market value of a work.
1. The quality of the work
The level of work and technique used to create a piece will be one of the most important factors to consider when valuing it. The use of reusable 3D elements, for example, will command a lesser value than fully custom pieces with unique components. Unless you are a digital artist, the best way to evaluate the level of work involved in a piece and its ensued value is to compare it with similar pieces and similar artists’ work. Look for uniqueness and effort behind the creative concept and its components.
2. The artist’s background
The artist’s background will play a major role in defining the potential value of a piece.
You should consider:
Previous clients and work with artists, brands, and companies;
Museum and gallery exhibitions as well as important awards;
Quality of the pre-existing portfolio;
Experience in the crypto art space (when they first minted, what have they been producing since);
Social media/online presence.
3. The artist’s style and the work's style
An artist’s style defines them and can have a major impact on their artwork’s value. Artists with unique and identifiable styles will often attract higher prices, as opposed to those who constantly adapt their style to what's popular at the moment or what's "in demand" as they create recognizable brands.
4. The artist’s price history
It’s important to review an artist’s work value outside of NFTs, as well as the price history of their crypto art pieces. Artists may have moving floor prices influenced by past sales, which should be considered. Ideally, the floor price will increase over time, indicating a healthy collector base and growing demand.
5. The artist’s collector base
An artist’s work is worth as much as his/her collectors and the market believe it’s worth. Collectors should review who has collected other pieces from an artist to assess the profiles and sophistication of the collector base. Dedicated collectors instead of speculators is a good sign for the artist’s future value.
6. The artist’s audience
The crypto art market has the advantage of being global and open 24/7: artists do not necessarily benefit from (or even need) the help of galleries to promote their work. As such, the size of an artist’s audience on social media (mostly Twitter and Instagram), will play a role in their ability to sell their work. It’s an important factor to consider for a healthy secondary market for collectors as well as future appreciation of the artist’s artwork.