Red or blue? Choose wisely!
The recent global health crisis brought about financial challenges. Art is known for its investment qualities. Having the potential to appreciate in value over time while acting as a hedge against inflation, art owners decided to hold on to their valuable pieces to protect their capital.
With a limited supply of blue-chip works available on the market while investors are looking to diversify their portfolio by acquiring art, an unintentional shift has occurred. Art investors had to look somewhere esle: red-chip art.
Before we dig into this new grade, let’s have a look at what’s commonly referred to as blue-chip art.
Decoding Blue-Chip Art
Obnoxious Liberals by JEAN‐MICHEL BASQUIAT @ The Broad, Los Angeles, USA
The term “blue chip” was coined in 1923 by Dow Jones employee Oliver Gingold and represents a stock that is selling at a high price due to public confidence in its long history of stable earnings — “blue chip stocks” being a reference to the most valuable poker chips.
A few decades later, it made its way into the art market jargon: blue-chip art describes works of art that are highly sought after and have years of consistent sales.
They come from internationally renowned artists, such as Pablo Picasso and Jean-Michel Basquiat, who have a proven track records, generally selling at auction at high prices, and whose economic value is expected to hold or increase over time.
Red is on the rise
The Bathers by AMY SHERALD (Phillips)
Red-chip artists are emerging contemporary artists without wide recognition but rising market value.
Often skipping the traditional route to enter the art market, red-chip artists are using the internet and social media to promote themselves. Instead of developing a stable reputation over time, they usually achieve great success quickly, selling their work for astonishing prices.
More risky as an investment, it has the potential for great rewards in terms of growth and appreciation, as buyers can get their hands on a piece before the artist becomes highly popular.
A new world of art, more connected than ever
The advent of digital technology has revolutionized many aspects of life. Social media and the rise of online spaces allow artists to develop meaningful connections with their audiences, wherever they are.
Art consumers get to know talented up-and-coming artists before the price of their work skyrockets. Lower sale prices make red-chip art more accessible than blue-chip art for investment purposes and allow emerging artists to grow their careers through increased exposure.
New artists and collectors, who generally do not come from the traditional art scene are taking their seat at the table. We experience a diversity of tastes and trends, filling a void as younger generations entering the market seek out unique discoveries that explore themes different than those commonly found in blue-chip markets.
This allows for a more democratic ecosystem, promoting diversity as a wider range of artists and consumers can navigate a world less restricted by a handful of institutions.
aēra
Making it easy for people to enter and navigate the art world, wherever they are.
*This content is for educational purposes only and does not constitute financial advice.