This New House

After nearly 300 years of doing business in old-fashioned ways, Sotheby's rewrote its playbook during the pandemic by embracing the frothy NFT market and a Netflix-like algorithm to make a serious bid for a new generation of clients.

- By Abram Brown

IN THE FALL OF 2020, a young staffer in Sotheby’s Contemporary Art department made a bold pitch to explore a new asset class, hoping to score points with Charles Stewart, the company’s new CEO. Stewart hadn’t heard of NFTs — nonfungible tokens, now famous for birthing Bored Apes and CryptoPunks — but he was intrigued. Maybe there was something in it for the venerable auction house founded in 1744.

“I certainly didn’t anticipate what was going to happen over the next 12 months,” says Stewart, 52.

Indeed, few could have predicted that within a year NFTs would become as coveted as a Picasso or a Porsche to a new generation of young, crypto-obsessed collectors. Sotheby’s sold nearly $100 million of NFT art and other digital collectibles in 2021 — admittedly a small portion of the $17.6 billion purchased worldwide last year — and less than the roughly $140 million sold by its chief rival, Christie’s. (Though about half of that came in one record-setting sale, the $69.3 million auction last March of a collage by the artist known as Beeple.)

Sotheby’s expects to increase its share of that market this year even considering NFTs’ hyper volatility, against which it has hedged with sales in other new markets and its core Contemporary and Modern art sales. OpenSea, the largest NFT marketplace, had a record January, with $5 billion in sales. By late March, trading volume had decreased more than 20% from a month earlier.