Ask an Art Advisor: Is Art a Bubble? Are NFTs Art?

Today, top collectors tend to rely on art advisors to guide them on what they should or shouldn’t buy — one of the most famous names is New York-based consultant Lisa Schiff.

Ms. Schiff, who counted Leonardo DiCaprio as a client until a few years ago, has been in business since 2002 and now has an office in Tribeca that doubles as an exhibition and production space for the artist.

In a recent phone interview, Ms. Schiff spoke about the impact of the pandemic on her business, the NFT boom and the state of the global art market.

This conversation has been edited and condensed.

How has the pandemic affected business?

A lot of my clients bought more houses and started renovations, so they had more empty walls. This provides a lot of business. The pandemic has also pushed us all into the online realm.

what does this mean?

I now see two models of value creation: a traditional system and a new system in which investment value is separated from critical and aesthetic value and art disappears.

Traditional value creation occurs over many life cycles as artists go through a series of agreed-upon benchmarks: other artists, curators, institutions, academics, collectors. Over time, some artists, and some of their works, entered the blue chips.

Today, it’s pretty messy. Certain auction houses are imitating the collectibles market. Everything is a piece of cake. Evening auctions are those auction houses that know they can turn a profit this week. You have sneakers, dinosaur bones, some NFTs, 50 artists you’ve never heard of, and three artists who should actually be in the evening auction.

It’s really disturbing. I don’t understand how I can pay $3 million for a 30-year-old artist who doesn’t have a museum show. I am terrified of this weird market based only on information and chatter.

So where are we going?

We are entering really dangerous territory as this inspires a whole host of new financial mechanisms. The new banking system makes its own assessment based on today’s auction transactions.

What do you think of Beeple, which sold NFTs at Christie’s for $69 million last year?

That’s not art. That’s another story.

Why isn’t that art?

Second, your only condition for success is based on what someone is willing to pay, which is completely detached from any aesthetic and critical value. NFTs, depending on how you define them, take the art away.

I have no problem editing digital art or needing it to be more secure in the blockchain. I have a question, it’s immediately tied to its selling price.

By the way, I buy and sell NFTs. I just don’t see them as art: I’m gambling.

You are an art consultant, but you also sell client-owned art. Isn’t this a conflict of interest?

I see them as very different businesses. I have clients who sell stuff. I can’t give my client’s stuff to my other clients because then I’m representing both parties. You must be transparent.

What is it like to advise Mr. DiCaprio?

It’s a huge treat. He is 1000% a true collector. He collects dinosaur bones, travel and travel items, odds and ends.

Can you give an example of an artist he likes?

Camilo Restrepo from Colombia, who played at Steve Turner in Los Angeles, if it wasn’t for Leo, I would never have seen Camilo Restrepo. I saw the work through his eyes and loved it.

Art prices seem to have been on the rise, especially when it comes to blue-chip art. Is art a bubble?

Now, absolutely not. These four artists have a bubble, but the 1,000 artists are falling.

I tell new collectors: Art is not fluid. If you feel you might need to put your money out for a rainy day, then don’t collect art, as your tradable window is two weeks long – unpredictable. Don’t try to sell when it doesn’t exist. And yet everyone does it, they hate it, they’re outraged.

On any given day, even your $100 million Jean-Michel Basquiat head is worth zero—unless you match it with someone willing to pay what you think it’s worth.

This is not how people perceive the art market.

Because they only see auction prices and everything going higher. They also don’t understand the whole auction system. How many works are guaranteed? This will tell you a lot about the sale. Stuff may not be fully sold without a guarantee against them. It’s hard for any industry right now. We are in a relentless capitalist space.

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