Last month, I wrote about investing in art. It’s not something I do, except for a few animation cels I bought in the early 1980s. But if you have a lot of money, the value can be portable, and the returns can be glorious. Especially if you’re willing to wait a few generations, leaving that value to your grandkids.
Of course, I’m also not wealthy enough to buy high art. I’m a journalist, and I’m not on TV. So maybe that was all a dream.
Or was it? Because there is a way for the great unwashed of the investing public to buy and hold high art. It’s called Artsquare.IO.
ArtSquare Review: How It Works
Artsquare is the creation of Italian venture capitalists based in Britain. Fabrizio D’Aloia founded Microgame, a “gaming” company. Francesco Boni Guinicelli has been part of iStarter, the Italian accelerator in London, since 2013.
The site uses blockchain, but not Bitcoin, to create tokens at 1 euro each which users buy and then use for fractional shares in art. The highlight of the collection is Kiku, a 1984 piece by Andy Warhol, said to be worth 28,000 euros.
The idea is that ArtSquare will buy the art, hold it, then sell it and distribute the proceeds to those on the blockchain. If the Warhol eventually goes for 56,000 euro, you get twice what you put in.
A lot depends on making sure ArtSquare isn’t ripped off. The site says it’s working with leading galleries and a top-notch advisory firm to assure authenticity.
What They Say
It’s all part of a growing trend, middle class investors being lured into high end investments through fractional ownership. You don’t get to have the goods, but you get a piece of the profits when the people who do have them sell.
There are many other sites doing something similar.
Rally.Rd., which works on a mobile app, deals with all kinds of collectibles, including cars, baseball cards, and rare books. My Racehorse sells racehorses. Curioinvest sells cars. Acquicent deals in all types of collectibles. Mythic Markets sells pop culture collectibles, like the first Spiderman comic.
The biggest of these markets may be Masterworks, which features works by Hockney, Monet and Picasso on its main page. While Artsquare is based on blockchain tokens, Masterworks trades in real dollars. Its deals are syndicated through circulars filed with the Securities and Exchange Commission. Masterworks also maintains a New York gallery where members can see what they have a piece of.
The Bottom Line
There are two ways to look at Artsquare.
On the one hand, there’s the 2019 way. There are a lot of fools with money who were lucky to get together, and a lot of people happy to separate them from it.
On the other hand, there’s the 2020 way. Blockchain and the Internet now let anything become a commodity and let anyone play in the game. If you can buy part of a Tesla (NASDAQ:TSLA) share at Robinhood (and now at mainstream brokers like Charles Schwab (NASDAQ:SCHW)), why not art or baseball cards?
My concern is with the liquidity of the market. Stocks are very liquid. Kandinskys are not. I know what I’m getting at Schwab. I must trust someone else on the value of art.
But if art is where you want to put money, sites like ArtSquare can put that money to work now.
Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of the environmental thriller Bridget O’Flynn and the Bear, available at the Amazon Kindle store. Write him at firstname.lastname@example.org or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this story.