Art Investment Trends for 2023

The latest art investing trends are providing some useful insights for investors.

Portfolio diversification can be achieved through various means, including alternative investments in fine art, which could broaden an investor's asset mix. However, investing in art successfully requires a high level of knowledge and expertise. In this context, art investing trends offer valuable insights for investors.

Digital Art is here to stay

The first trend that has emerged during the COVID-19 pandemic is the rise of digital art, facilitated by the use of non-fungible tokens (NFTs). NFTs provide a record of authenticity and ownership, enabling artists to sell directly to collectors and receive royalties when their works are resold. The 2022 Art Basel and UBS Global Art Market Report shows that art-related NFT sales grew from $4.6M in 2019 to $2.6B by the end of 2021, and high-net-worth (HNW) collectors show more interest in collecting NFTs than traditional galleries in representing them. This represents a sizable opportunity, with 88% of surveyed HNW collectors expressing interest in purchasing NFT-based artworks in the future.

Focus on Unrepresented Artists

The second trend is the recognition of under-represented artists, particularly African-American, African-British, and continental African artists. Efforts to recruit African-American advisors to the boards of directors of American museums and heightened social consciousness inspired by the Black Lives Matter movement have awakened significant demand for the works of artists of African descent. The first signs of this trend were seen in 2016, when "Plunge," a work by African-American artist Kerry James Marshall, sold for $2.16M at Christie's New York, followed by "Past Times," which fetched $21.1M at Sotheby's New York in 2018.

Fractional Ownership

The third trend is fractional ownership, which can add a pool of artworks by blue-chip, mid-career, and emerging artists to an investor's portfolio with one investment. This method can take the guesswork out of investing in art, as the best funds employ third-party appraisals and expertise, backed by analysis from companies like Athena Art Finance, which has funded over $400M in fine art investments. Fractional ownership can put more costly investments within easier reach, making contemporary artworks more accessible to mainstream investors.

These three art investing trends bode well for the future of art as an asset class. Investors with a passion and appreciation for art who are willing to conduct thorough research may find outstanding opportunities in today's art market.