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The great Warren Buffet said, “It’s only when the tide goes out that you find out who’s swimming naked.” If the markets have shown anything recently, it’s that the owners of large growth stocks like it TSLA, AAPLand AMZN they need swimwear. Since the beginning of 2022, more than $1 trillion in total has been wiped off their total stock value.
Cryptocurrencies, often touted as a hedge against volatile markets, mimic stock market falls. According to Arcane Research, the 30-day average correlation between Bitcoin and the Nasdaq reached 0.82 in early May. Bitcoin is down more than 50% from its November highs. All this while inflation continues to worsen, pushing real bond yields into negative territory.
All eyes on this safe haven
While financial markets around the world hang by a thread, the $1.7 trillion art market has shown resilience and achieved record results.
Amidst all this turmoil, the art market has had some of the biggest sales on record. As the New York auction season ramped up, a masterpiece by legendary artist, Andy Warhol reached $195 million at auction.
For many collectors, this isn’t a hobby – it’s serious business. Jeff Bezos, who once tried to work with Sotheby’s in an ill-fated venture in 1999, has fetched record prices with recent art purchases. In 2020, Bezos spent a total of $70 million on two paintings by Ed Ruscha and Kerry James Marshall.
As an investment, fine art is prized not only for its appreciation, but also for its low correlation with public markets and its inflation-hedging qualities. In its latest art market report, Citi concluded that art has historically had a near-zero -.04 correlation with developed stocks, the lowest of any major asset class.
With investors flocking to safety, experts expected demand for high-quality projects to be high. Even now, the results have blown away expectations.
Is this market just heating up?
If recent auction results are any indication, 2022 could be one of the best years for the art market on record. In the first half of the year, the total produced at art auctions was $5.7 billion.
The resilience of the art market is not a new phenomenon. According to Citi data, the art market returned 28.2% during COVID-19.
New demand drives growth
Demand in the art market has been linked to rising levels of wealth. In recent years, fast-growing emerging economies in Asia have been a huge source of demand, particularly for younger buyers. But in today’s digital world access to the art market has also improved dramatically.
As Citibank recently reported, fractional art investing has opened up the market to investors far beyond the ultra-rich. With the Wall Street Journal recently calling the art market one of the hottest in the world, investors are flocking to alternative investment platforms.
The recognized leader in the field, and the first such platform to hit the market, is Masterpieces. According to the firm, it has regularly offered investments in blue-chip artists such as Andy Warhol, Basquiat and Banksy to its members. Masterworks reports a track record of 14.3%, fee-free, since inception.
Masterworks’ mission is to democratize the art investing world and help people tap into an investment previously reserved for the ultra-rich. We are the only platform that allows you to invest in multi-million dollar artworks by artists such as Basquiat, Picasso, Banksy and more.
Tom El Hilow
See source version on newsdirect.com: https://newsdirect.com/news/renowned-bubble-predictor-and-founder-of-70-billion-investment-firm-reveals-why-dot-com-crash-was – paradise-compared-to-now-353962279