Tokenized art is booming!
The tokenization of art has made it possible for the average person to buy and sell shares of paintings for either investment purposes or to use as a hedge against inflation. Tokenization makes it possible for people to buy and sell shares of paintings that are otherwise difficult or impossible to redeem. Previously, tokenized art was limited to tokenizing real estate but it is now possible for all kinds of valuable assets to become tokenized.
Investors also have the option to keep their token shares until they believe the art piece will increase in value at which point they will be able to either cash out or hold onto the asset.
This process does not require expensive third party intermediaries. It is possible for token holders to tokenize all kinds of valuable assets or real estate by leveraging the blockchain.
The tokenized art market uses blockchain technology, allowing buyers to simultaneously purchase multiple tokenized paintings in a single transaction so that the art can be traded or exchanged at any time without having to go through third-party brokers.
Tokenizing art is not new, but it’s now being used by artists themselves who are creating their own tokenized works using it as an alternative model.
One company that is rapidly growing this trend is Masterworks, a tokenized art platform where artists can tokenize and sell their art.
Masterworks tokenized paintings are tokenized shares of individual works of art. Each token represents the ownership of a small share in the underlying asset, which is represented by an actual piece of original artwork.
Masterworks may be a wonderful method to get started in fine art with a modest investment.
Purchases of art by Masterworks are made using an algorithm-based list of artists. To choose top artists with established track records for appreciation, it relies on data from more than 1 million art auctions. Masterworks focuses on pieces that have shown a 9% to 15% yearly return on average.
Masterworks acquires the work and records it with the SEC, which issues shares in $20 increments. There is a limit of 10% of any one piece’s outstanding shares held by any individual investor.
Where is the art stored?
The art collection platform keeps your painting in a members-only gallery in New York and may store it for three to ten years.
What is minimum investment?
You don’t have to be an accredited investor to use Masterworks’ platform, and there isn’t a minimum investment requirement.
How to buy Masterworks art
If you want to join Masterworks, you must first request an invitation. The only way to purchase artwork on the platform is through this method.
Before receiving the go-ahead to begin investing in art, you will be invited for a phone interview to discuss basic info and details.
Once you’ve been accepted, you’ll be a welcomed Masterworks investor.
Investing in Masterworks is completely free, therefore you may join without paying any fees.
Once your Masterworks account is set up, you can directly link to your bank account from the platform’s home page.
Though, you can only link and start making purchases once you have completed your phone interview and secured approval to use the investment platform.