Sotheby’s announced on Tuesday that it will accept Bitcoin and Ether at Banksy’s upcoming Love Is In The Air auction.
According to Sotheby’s, this is the first time that a major auction house will accept two cryptocurrencies as payment for a physical work of art. The winning bidder can also pay in USD.
“What better combination to represent cryptocurrency than the iconic Banksy painting,” Sotheby’s CEO Charles Stewart told CNBC’s Squawk Box on Tuesday.
Sotheby’s latest entry into the world of digital assets comes through a partnership with cryptocurrency exchange Coinbase, which went public in April. Sotheby’s first outing came last month when the auction house sold non-fungible tokens, or NFTs, created by digital artist Pak.
Banksy’s Love Is in the Air is one of the most famous works of the British street artist, whose real name is unknown. The auction is scheduled for May 12th. Stewart said the bid is valued at between $ 3 million and $ 5 million.
Gallery assistants adjust “Love Is In The Air” by British graffiti artist Banksy ahead of its sale in London on June 24, 2013.
Justin Tallis | AFP | Getty Images
“It’s possible that the winner of this painting is paying in dollars, not crypto, but I think it’s interesting for us to create an opportunity for that,” Stewart said. “There is obviously a large audience interested in the aesthetics and capabilities of NFT. Why not expand to the world of physical art as well? It will be very interesting to see. “
During NFT’s three-day sale, Paka Stewart said Sotheby’s attracted more than 3,000 buyers. In total, the collection sold for $ 16.8 million. “We are definitely seeing a large – and mostly new – audience from Sotheby’s perspective,” Stewart said.
In March, Christie’s became the first major auction house to sell NFTs, blockchain-based assets that are unique in design. Digital artist Beeple’s work has been sold for nearly $ 70 million. Christie’s accepted broadcast as payment for the Beeple auction.
Bitcoin is the world’s largest cryptocurrency by market value, according to CoinMarketCap.com, at just over $ 1 trillion as of Tuesday morning. Ether, running on the Ethereum blockchain network, is the second largest cryptocurrency by market value at over $ 400 billion.
If the winning bidder pays for the Bansky painting with Bitcoin or Ether, CNBC’s Andrew Ross Sorkin asked if Sotheby’s plans to keep the cryptocurrency or convert it to US dollars immediately.
“We have an agreement with the owner of the painting, the shipper of the painting, so it’s ultimately up to them to decide,” Stewart replied. “Partnering with Coinbase gives us not only the ability to process a payment, but that ability as well.”
The announcement on Tuesday from Sotheby’s, founded in 1744, represents further institutional adoption of cryptocurrencies.
Earlier this year, Mastercard said it would begin supporting some cryptocurrencies on its network, while major Wall Street banks Morgan Stanley and Goldman Sachs took steps to offer their asset management clients access to bitcoin.
Other companies like Tesla and Square bought bitcoins to keep them on balance. Tesla has also started accepting bitcoin as payment for its electric vehicles.
The use of Bitcoin for shopping carries significant tax implications due to its classification by the IRS.
The IRS considers bitcoins to be property, so spending bitcoins is treated essentially the same as selling them. This means that a person who pays for a good or service in bitcoin could potentially have a capital gains tax debt at the time of the transfer of ownership if the value of the bitcoin is higher than it was when it was originally acquired.
Bitcoin traded just under $ 56,000 per token on Tuesday, according to Coindesk, bringing it up more than 90% since the start of the year. Ether traded just below $ 3,500 on Tuesday, slightly below all-time highs reached earlier in the day. By 2021, Ether has grown by over 360%.