Posted by: John Elliott | January 18, 2022

Indian art moves into the multi-billion dollar crypto tokens market

Prinseps and Artiana led the way last week with two sales 

Big name auction houses cautious about South Asia digitals

Indian modern art is beginning to appear in the astonishing digital market as non-fungible tokens (NFTs) that can suddenly fetch millions of dollars – even though they exist somewhere out in the crypto stratosphere of Ethereum and Bitcoin blockchains and you can’t hang them on your wall as one-off creations.

Two relatively small South Asian art and collectibles auction houses, Prinseps of Mumbai and Dubai-based Artiana, launched NFTs last week. Others are planning launches and exploring the potential, trying to assess the appeal of the little-understood technology to existing art collectors and a wider range of speculative digital buyers.

Prinseps 35 works by Gobardhan Ash

Prinseps has auctioned small relatively low-priced figurative works (right) painted in the late 1940s by Gobardhan Ash, a little-known but significant Bengal artist. Artiana has a fixed price sale of larger more expensive works by better-known Sakti Burman, who lives between Paris and Delhi and is still actively painting. 

A different sort of NFT sale is planned by Kent Charugundla, a New York-based leading collector of Indian art and a blockchain specialist, with a massive work by the revered M.F.Husain. (He talks about that with Prinseps curators and others on this you-tube session that also covers the Gobardhan Ash works). 

Many traditional collectors of Indian modern art are mystified and scathing about NFTs, which use the same technology as crypto currencies such as bitcoin to create a certificate of ownership over a specific digital file that cannot be copied or forged.

“It sounds like the world’s greatest Ponzi scheme,” said one, referring to the crypto market in general, while another thought that it “smacks of money laundering”.

But Pratap Bose, a long time Mumbai-based collector and dealer, who bought several of the tokens in the Prinseps auction, sees them as a good investment. “Like the stock market, it’s taking a punt,” he says, adding that much of Indian art is under-valued so there is strong potential.

For artists, the NFTs provide a way to benefit from the often substantial increases in prices that come after their works are initially painted and sold. In some countries, including the UK and EU, artists benefit from resale rights that give a percentage commission on their works in the secondary professional market. This lasts through their lifetime and for 70 years after their death. That does not apply in India, which will increase artists’ potential interest in having their works offered as tokens.

Estimates of NFT sales globally last year range from $18bn to $25bn, up from $94.9m in 2020. They vary “from cartoon apes to video clips” (as Reuters put it) with images, videos and even lands in virtual worlds.

The tokens broke onto an unsuspecting art world in March 2021 when a jpeg file collage (below) of tiny digital sketches done daily for over 13 years by South Carolina contemporary artist Beeple, sold for $69.3m at Christie’s. It had been launched with a $100 bid just two weeks earlier. The FT reports that “the artist, whose given name is Mike Winkelmann, summarised his reaction to the sale with a tweet: ‘holy f..k’ ”.

Major auction houses and artists have cashed in on the craze, but they seem wary of bringing South Asian art to the virtual table. Christie’s, Bonham’s and Sotheby’s have not yet decided what to do. Saffronart, the Mumbai-based market leader, is focussing instead on reinventing auctions with a new platform that Dinesh Vazirani, the founder and ceo, says he plans to launch next month.

Beelpe’s $69m collage

Deepanjana Klein, the head of Christie’s South Asian art business, gave me the best logic for what is happening: 

“NFTs are an additional art form, such as photography, installations and digital art or AI that entered the art world at different moments in time,” she said. They were “about democratization of art and sharing of the digital art which goes with the NFT – anybody can download the art but the token belongs to only one person”. 

The democratisation comes from everyone being able to access the token on the internet, while only the buyer has ownership of the token and can sell it – though arguably that can also be said of ordinary paintings whose images can be accessed and shared by anyone on the internet. The NFT owner can of course print out the image and put it on a wall, knowing he or she owns the digital token. The original painting could sometimes also be bought. 

That is what Prinseps offered on January 14 in their auction of both the original painting and an NFT of 35 works by Gobardhan Ash (1907-1996). The paintings, oil on board and gouache on board or paper, varied in size, typically about 13in x 11in, and went for Rs50,000 to Rs100,000 or approx $670 to $1,340. The tokens fetched Rs12,500 to Rs35,000 – $170 to $470. That is in line with some market calculations that the tokens will fetch 25-30% of the original art. (Catalogue and explanation here)

Prinseps decided to launch itself into NFTs with Ash’s works from the 1940s because it felt his small paintings were in tune with the cryptopunk images’ primitive style and vibrant colours that fuelled last year’s enormous NFT growth. The works “were very avant-garde for the time – and 70 years later cryptopunks become commonplace,” says Brijeshwar Gohil, a Prinseps curator.

Cryptopunks

Some of Prinseps buyers went on January 14 for both the original and the token, while others chose only one. A few collectors tried to win as many as possible, judging by the frequency that some “alias numbers” appeared on the auction website during the bidding.

Among them was Bose, a former top advertising executive. He says that Ash is an under-recognised Bengal artist “who never got his due”. That intrigued him, not for hanging works on the walls of his home but as an crypto investment. 

Prinseps’ next NFTs auction is likely to be fashion sketches by Bhanu Athaiya (1929-2020), a film costume designer and Oscar winner, whose works it has sold earlier.

‘The Mythical Metaverse’ – one of the Sakti Burman works being offered as an NFT, based on his 2009 painting titled ‘Music Illumines the World’

While Prinseps did a deal with Ash’s estate for the NFT rights and mounted the auction on its own website with purchases payable in Indian rupees, Artiana has worked out an arrangement with Sakti Burman and his family to sell 40 NFTs on the OpenSea crypto website. The works (one is above) are priced in OpenSea’s Ethereum crypto currency, accompanied by the conventional currency equivalents – roughly $20,000 to $40,000.

The dollar rates were negotiated by Lavesh Jagasia, who runs Artiana, with Burman according to what the artist felt he should receive relative to current market values – and what the buyers might accept, given that this is the first such Indian sale.

Jagasia says Burman’s works are specially suited to NFTs because of the fresco-like images produced by artist’s marbling oil on paper and canvas technique, which the artist was using between the 1980s and 2015. 

An early 1981 (154x114cm) work in the series achieved the artist’s record auction price of $330,000 (approx Rs2.4 crore – Rs24m) in an Artiana sale last October. The paintings vary in size from 116x89cm to 162x130cm and sold, Artiana says, over the 35 years for between Rs50 and 85 lakhs (Rs5m – Rs8.5m) or $67,000 to $114,000 at current currency conversion rates. 

The originals of the 40 works are now in private collections and Artiana is trying to find the owners so that it can offer them the NFT of their paintings. That process will end on February 8 (Burman’s 87th birthday), when the unsold tokens will be generally available on the OpenSea website.

The other current NFT investment offering, that lasts through 2022, is of tokens for a famous 60ft x 10ft mural, Lightning, by M.F.Husain, one of India’s leading modernists and a member of the mid-1900s Progressives. Charugundla bought the work (below), which was painted in 1975 and is Husain’s largest work, direct from the artist in 2002. It consists of 12 panels depicting galloping horses, a Husain favourite. 

M.F.Husain’s largest painting, ‘Lightning’ that goes onto the crypto universe soon

The NFT “drop” is on a special platform lightning.io with Prinseps helping on marketing. Later secondary sales will be on OpenSea. Investors can buy small random parts or “traits” of NFTs at prices that Charugundla says will be set relatively low. Buyers who manage to assemble what is called a “royal flush” of 62 “traits” will be given an NFT of the whole work that can later be traded.

Although the virtual currency world has hit headlines because of astronomic increases in values like Beeple’s $69.3m sale, the craze for cryptopunks images was built on very low prices, which Prinseps has echoed with its Ash works. It remains to be seen whether there is a virtual market stretching up into the $20,000 to $40,000 that Artiana wants for its Burmans, and how much speculation there is on the Husain.

Scepticism remains. The total market value of NFTs on the Ethereum blockchain is held by just 9% of the accounts, according to one expert, rebutting the idea that they somehow democratically spread the assets widely. 

The Washington Post reported last March that MetaKovan, who paid the $69.3m, was in fact driving up the value of NFTs he had created earlier. He had bought 20 other works by Beeple for $2.2m, divided them into 10m blockchain-based tokens, and sold 25% of them to the public.  As bids for the new work kept rising, so did the value of those tokens, which reached about $51m by March 11, the day he won the Christie’s auction. 

The Post’s conclusion? “The recent frenzy around digital art may be less a sign of an artistic revolution than a gold rush into highly speculative blockchain technology.”


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