Sotheby's to accept crypto as payment for Banksy auction

Sebastian Fahey, Sotheby’s EMEA Managing Director joins the Yahoo Finance Live panel to discuss the growth in the cryptocurrency industry and the Sotheby NFT sale taking place next month.

Video transcript

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ZACK GUZMAN: Welcome in to Yahoo Finance Live. In this week's Cryptic Corner, we are digging into the way that traditional auctioneers here have been approaching the crypto opportunity. We've seen this world between traditional auction houses and crypto start to blend here. Christie's, of course, made history earlier this year by moving to accept it as a form of payment in their $69 million Beeple NFT auction. And now Sotheby's is making a move of their own here, as well, with the help of Coinbase, to auction off one of Banksy's most prized pieces, the famed auction house kicking off the bidding for Banksy's "Love Is in the Air," on Wednesday night, in an auction that's estimated to fetch between $3 and $5 million, potentially more, than that alone.

Sotheby's also has an NFT-themed auction slate of their own planned for a bit later in the year, including the NFT that triggered the whole movement. And joining us now for more on that is Sotheby's EMEA managing director. Sebastian Fahey joins us right now. Sebastian, good to be chatting with you.

Today, sir, obviously, this art piece from Banksy, I mean, this one needs no introduction. But talk to me about maybe the push here to accept crypto and how you're seeing it fit in to what you guys have planned there at Sotheby's.

SEBASTIAN FAHEY: Hi, Zack. Well, thank you for inviting me on the show. Great to be here. So as you mentioned, so since Sotheby's debut in the NFT space last month with a very successful sale from the world-renowned digital creator Pak. We've been continuing to explore possibilities and have a boast in accepting cryptocurrency, both physical and digital art. And with the Banksy on Wednesday sale, on the 12th of May, in the contemporary art evening auction, this will be the first time of any auction house accepting cryptocurrency for the payment of a physical work.

As you mentioned, the next step in our pattern with NFTs, we'll be holding-- and also, announced last week-- our next sale will be in the Natively Digital sale, which is going to be a survey of the NFT space, going all the way right back to Kevin McCoy's quantum, which was minted in 2014, a seminal work which is universally regarded as the first NFT. And we'll be complementing that with other NFT works, bringing the survey all the way up to the present day.

ZACK GUZMAN: Yeah, I mean, when we look at maybe what's going on in the NFT space, obviously, the Beeple one, caught a lot of attention for kind of the dollar figure that it attracted. But I've also been going back and forth with our guest, just talking about the way that it might attract a larger dollar value. Of course, we've seen things paid in ETH. People can pay for this one here in Bitcoin or Ether. Talk to me about maybe what you've seen in terms of expectations rising, when it comes to a winning bidder paying in crypto, versus traditional currencies.

SEBASTIAN FAHEY: So we see, with the Pak sale last month, we held our sale with Nifty Gateway in partnership, in order to be able to accept cryptocurrency for the first time as an auction house ourselves. With the Banksy sale, this will be the first time that we have accepted cryptocurrency on our own platform. As you say, the hammer price can be paid in either Bitcoin or as traditionally, in fiat currency, in US dollars, as is traditional with a sale.

And what we're trying to do here is to open up with an innovative payment option to supplement the usual ways of payment in our auctions. So the expectation on pricing is and the price achieved, as a result of opening up to crypto payment, remains to be seen. But this is additive to our usual payment mechanisms.

AKIKO FUJITA: And Sebastian, how much of this is driven by these new millionaires, essentially, that have come online? You know, we were speaking at Christie's when they had the Beeple auction, talking about how many new investors they saw, those who they weren't really familiar with, bidding on some of the artwork. I wonder how much of that dictated the decision for Sotheby's?

SEBASTIAN FAHEY: Well, exactly. In our Pak sale last month, we had over 3,000 buyers in that sale. And the vast majority of those were new to Sotheby's. So this is piquing our interest in exploring further possibilities with accepting crypto payments, experimenting with more NFT sales, in order to reach a new and extended audience and to bridge that gap between the digital space and the physical that we are world-renowned sellers in.

With the Natively Digital sale that we have coming up next month, this is where I think Sotheby's comes into its curatorial role in the same way that it does, and has done for many years, in physical art in a way of looking across the artistic space and bringing to the forefront of the market those artworks that-- those NFT artworks that we feel really have shaped the market to date.

ZACK GUZMAN: Yeah. It's-- I think it surprised a lot of people at how quickly it's moving in regards to how these traditional auction houses feel about crypto. And to a certain extent, maybe they had no choice, because of the money that was being brought in on these alternative platforms. But why stop at Ether and Bitcoin? Why not go all the way in? Why not say, look, we'll take Doge. We'll take whatever you got out there.

There's plenty of cryptocurrencies. If you're really trying to attract that audience, why stop there? And what do you see for plans moving beyond it, perhaps, maybe a Dogecoin being accepted at some point at Sotheby's?

SEBASTIAN FAHEY: Well, our collaboration with-- with Coinbase Commerce for the Banksy sale really paves our way to explore accepting cryptocurrencies further in the future. So we will-- we will see how this sale goes. We'll be looking at the Natively Digital sale, which, again, will be accepting cryptocurrency as a payment for that. And I think we'll be-- we'll be seeing how our-- both the crypto native buyers of both the physical and the digital artworks, as well as our traditional clients, respond in this way before setting our future strategy.