At a moment when the auction market for blue-chip art works appears to be sobering up somewhat after years of exceeding estimates, a sale of NFTs at Sotheby’s New York has shown the appetite for premium on-chain digital assets remains strong.

In the first of a series of sales hosted by Sotheby’s to sell off the hundreds of NFTs collected by bankrupt crypto hedge fund Three Arrows Capital, the auction house sold seven NFTs for more than $2.4 million.

The sale took place on May 19 as part of Sotheby’s Contemporary Art Day Auction with all seven lots far exceeding their pre-sale high estimates. The sale’s title “Grails,” which in NFT verbiage refers to historical NFTs that are believed to have enduring value, proved true with works from Tyler Hobbs, Larva Labs, Dmitri Cherniak, and 0xDEAFBEEF all maintaining high demand.

Tyler Hobbs, Fidenza #725 (2021). Courtesy of Sotheby’s.

One highlight was Tyler Hobbs’s Fidenza #725, one of his numerous generative colorful flowfields, which sold for more than $1 million, well above its $120,000–$180,000 estimate. Another was Larva Labs’ Autoglyph #187, a Sol LeWitt-inspired series that is considered the first generative work to have been minted on the blockchain, which sold for $571,500 over a $120,000 to 180,000 pre-sale estimate.

“The depth of bidding and strong results for the first group of seven works offered from the Three Arrows collection is a clear indication that the market remains active and that collectors are willing to pursue works of the highest quality,” Michael Bouhanna, Sotheby’s Head of Digital Art and NFTs, told Artnet News.

Dmitri Cherniak, Ringers #194 (2021). Courtesy of Sotheby’s.

Three Arrows Capital, which was founded by Su Zhu and Kyle Davies, went bankrupt in July 2022 following the collapse of Luna and TerraUSD, two cryptocurrencies the Singapore-based hedge fund had heavily backed. Alongside its crypto activities, Three Arrows Capital was striving to create a peerless NFT collection in part through collaboration with renowned NFT connoisseur Vincent Van Dough.

Following its collapse, consulting firm Teneo became the fund’s liquidator and set about trying to recoup money. In February 2023, Teneo released a notice listing Three Arrows Capital’s NFTs which included 30 of Hobbs’ Fidenzas, 17 of Cherniak’s Ringers, and 11 CryptoPunks. In addition to the NFTs seized by Teneo, there is a separate collection—the so-called Starry Night collection—which Teneo is still trying to obtain.

“We were very pleased to see the strong demand for the first auction of NFTs in the Sotheby’s GRAILS collection, and we look forward to bringing the rest of the collection to market over the coming months as part of the liquidation process,” Teneo told Artnet News. “These sales are taking place to fund creditor recoveries, and we remain focused on identifying and maximizing the value of 3AC’s assets.”

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