Did Sotheby’s “Natively Digital” sale just defy all the death-knell reports about the market for art-related NFTs?

The auction house’s innovative sale ended with a bang this morning. After a week of online bidding that kicked off on June 3—and in a pattern that has become associated with NFT bidding competitions—the action for the more than 25 lots on offer picked up to the point of frenzy as the sale entered the final ten to fifteen seconds, with soaring bids and hot competition at the tail end. All of the lots, labeled as “estimate on request,” had starting bids of just $100.

In all, 28 lots were offered and all were sold. The total was $17.1 million. Sotheby’s said nearly 70 percent of buyers were new to the auction house.

The star lot, and subject of the sole live-online hybrid action, was CryptoPunk 7523 (minted in June 2017)—one of the rarest of a cultish series of digital characters on the Ethereum blockchain made by artist/creator Larva Labs.

NFTs, or “non fungible tokens,” are unique digital tokens encrypted with the artist’s signature and individually identified on a blockchain, effectively verifying the rightful owner and authenticity of the creation.

Because CryptoPunk 7523 was the only CryptoPunk alien with a mask it’s also known informally as “Covid Alien.” Further, of the more than 10,000 characters in the series, the so-called “aliens” themselves are rare since there were only nine of them ever made.

“I’m not just selling an artwork, I’m actually selling a piece of myself,” said the seller, who goes by the name Sillytuna, in a promotional video for Sotheby’s. He added that he had looked after the NFT carefully during the past years of stewardship and that the image—which is also his avatar—is part of his identity.

Bidding opened this morning shortly after 10 a.m. with a reserve bid of $1.5 million. After a few incremental $100,000 jumps, the winning bidder suddenly leapt to about ten times that level with a bid of $10 million. After it was clear there were no more bids forthcoming, auctioneer Harry Dalmeny, who was overseeing the sale from the London auction room, brought the gavel down.

Including premium, the final price was $11.75 million. The price, especially considering that it is for a single CryptoPunk, far outstrips the previous—and very recent—result at a Christie’s May auction where Larva Labs consigned nine punks to the major evening sale that carried an estimate of $7 million to $9 million and sold for a final price of $16.9 million.

The buyer of today’s rare CryptoPunk was identified as Shalom Meckenzie, the largest shareholder of sports betting website DraftKings. “This CryptoPunk appealed to me because It is part of the Alien collection which is the rarest of the punks and the only alien that has a mask. I thought it  was symbolic of covid and the popularization of NFTs,” Meckenzie told Artnet News via email.

Asked what the bidding competition was like, he said: “It was a bit stressful because I really wanted this particular CryptoPunk which is symbolic of this period. I am very happy it worked out in my favor.” When asked about his interest in NFTs in general, he said: “I’m a big fan of NFTs and yes this is the first one I have purchased. I did a lot of research on the value and I have no doubt that NFTs will be a disruptor in the art industry.  I am definitely planning to expand my NFT collection.”

Kevin McCoy Quantum Image courtesy Sotheby’s.

Meanwhile, Sillytuna was active on the buy side too, snapping up Kevin McCoy’s Quantum (2014–2021), an animation that is widely considered to be the first NFT ever made. It even pre-dates the term itself, since it was minted on Namecoin Blockchain in 2014 before being minted as a token this year by the artist.

At about 10:30 a.m., the highest bid registered on the Sotheby’s website was $600,000—but then the real action began. Moments later, the price had soared and it landed with a final premium-inclusive result of $1.47 million. 

(Thus, while Sillytuna pulled in $10 million for the work he sold, he shelled out $1.47 million for another historic digital artwork. Still, he walks away with a rough profit of $8.5 million).

Sillytuna told Artnet News he heard about the McCoy piece from Robert Alice, the curator of the auction, and researched it with the help of Rhea Myers, who was also selling work in the auction. “It’s not well known but it is legitimate and I felt it needed a major auction house sale to start educating people of its provenance. I had made up my mind to bid but it was my definite final bid which won – which makes me very happy! As it turned out, I know the other bidder – a crypto investor with an art background.”

We asked if he planned to pay for the NFT in fiat or cryptocurrency. “I’ll be paying USD as it happens!,” he responded.

As it has been doing, Sotheby’s had a label on all of the lots that it will accept cryptocurrency (either Bitcoin or Ethereum) as payment for the lots.

Another highlight of the morning was yet another NFT by digital artists Pak, whose work was recently the focus of a successful $17 million sale total at Sotheby’s. 

This morning a Pak NFT titled Fade (2021) took $528,000. Pablo Faile, a self described “digital art patron” who collects NFTs and has made lucrative sales of Beeple’s digital works in the past, was discussing the topic on a Sotheby’s Clubhouse call when he announced he was pausing from the call since he was involved in bidding in the “Natively Digital” sale. He returned to Clubhouse soon after, announcing that he was the final buyer of the Pak.

Regarding his interest in Pak in particular, Faile wrote a lengthy comment to Artnet News: “my interest in their work remains the same as always, as they never disappoint and constantly improve and innovate on their previous work, truly extraordinary. They always release works that are both aesthetically pleasing and hugely innovative. There is always something more, something new, something that adds to the visual components of all their works and this is the best example (changing over the course of the year, upgradable, etc). In addition, this one is particularly special as it is one of the very few examples of any of their works that departs from their traditional black and white aesthetics. Overall a very profound piece that innovates and builds on the available technology to keep on pushing the possibilities of the space forward.”

Mad Dog Jones, Visor. Image courtesy Sotheby’s.