Jean-Michel Pailhon - Investing in the trillion dollar market of NFT art - ep 149
Dec 2, 2023
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Jean-Michel Pailhon discusses investing in the trillion dollar market of NFT art. They explore the potential of digital art on blockchains, the journey of a collector, the genesis of their investment firm for digital art and NFTs, investing in digital art as NFTs, the power of reputation and storytelling in art, the evolution of art in the digital age, and the rise of South Korea in embracing digital art.
The potential of the digital art market on blockchains to become a trillion-dollar market cap in the next 10 to 15 years, driven by the intersection of the global art market, alternative assets market, and the crypto market.
The importance of qualitative and quantitative factors in determining the value of digital art, including considering the story and reputation of the artist, their impact and cultural significance, as well as utilizing data and mathematical equations to assess value within different collections and artists.
The prediction that the future of art lies in digital native artworks, which provide convenience, accessibility, and the potential to surpass the traditional art market in terms of valuation within the next 20 years.
Deep dives
Background and Entry into Crypto and NFTs
The podcast guest shares his background in traditional finance and his transition into the FinTech space in 2014, specifically focusing on blockchain and Bitcoin. He highlights joining Ledger, a French company, as a key turning point in his career. As the crypto market grew, he recognized the potential of digital art on blockchains and its cultural and economic significance. This led him to leave Ledger and co-found Grand Capital, an investment firm focused on collecting and acquiring native digital artworks or NFTs.
The Potential of Digital Art Market on Blockchains
The guest believes that the digital art market on blockchains has the potential to become a trillion-dollar market cap in the next 10 to 15 years. He bases this prediction on the intersection of the existing global art market, alternative assets market, and the crypto market. By capturing a small market share from each of these three markets, he sees the digital art market on blockchains reaching a significant valuation. He acknowledges that the majority of traditional art collectors may not fully embrace the digital art market at present, but identifies the next generation collectors as the main audience driving this market.
Value and Factors in Digital Art Investing
The guest highlights the importance of both qualitative and quantitative factors in determining the value of digital art. Qualitative factors include the story and reputation of the artist, as well as their impact and cultural significance. Quantitative factors involve utilizing data and mathematical equations to assess the value within different collections and artists. The guest emphasizes the need for deep understanding, analysis, and curation in order to make informed investment choices in the digital art market. He also acknowledges the importance of human connections and networking within the digital art community to access the right pieces and engage with artists.
The Potential of Digital Native Artworks
The speaker believes that the future of art lies in digital native artworks. They emphasize the convenience and accessibility of digital art, highlighting how it eliminates barriers such as high costs and limited market reach. The speaker predicts that in the next 20 years, the digital art market could surpass the traditional art market in terms of valuation. They draw parallels with other industries that have seen profound transformations due to technology, asserting that the growth of digital art will lead to a broader and more global art market.
Understanding and Assessing Digital Art
The speaker discusses how digital art can be defined and assessed. They state that digital art falls within the realm of culture and can encompass a wide range of aesthetics and mediums. They mention that the correspondence between past art movements and current digital art can contribute to its cultural significance. The speaker also addresses the role of utility in digital art, noting that some NFTs have utility value beyond their aesthetic appeal. They emphasize the importance of considering both the qualitative aspects of the art and the artist's entrepreneurial mindset when assessing its value.
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