In the spotlight for about a decade now, digital art is increasingly popular. The Internet has certainly made the medium more easily accessible. But exactly what is digital art, and is it a good investment?
Those questions and more are answered below, in addition to how to invest in art and diversify one’s portfolio.
In today’s world in which technology is front and center, nearly everything is digitalized. Most people use computers, often in the form of smartphones, to communicate and check mail, and send videos and photographs to each other via social media.
Art has also entered the digital space. Running the gamut from digital paintings, animations, digital sculpting, and photographs to illustrations, videos, iPhone sketches and more, anything produced on digital media can be deemed digital art.
In other words, digital art, once dubbed “computer art,” is art made using computers, software, or another electronic device. It is any artwork for which digital technology is a key part of the creative process.
While some artists exclusively use digital apps to paint, draw, model, and create work, others scan and edit their physical pieces utilizing computer programs. Some digital art is wholly computer generated, employing data and algorithms.
Applications and uses are endless, but digital art is often used in advertisements and for graphic effects and animations in video games, films, etc.
In addition to being created, such art may be bought to enjoy, collected, or invested in. In particular, crypto art has permitted many digital artists to sell their works at prices once exclusive to traditional pieces.
There are distinct benefits that come with digital art:
This is somewhat controversial, since the final products are not physical items made with physical tools. However, digital art IS “real” art because it still essentially calls for the creative skills and techniques used in traditional art.
In fact, digital art requires the same amount of talent, skill, knowledge, originality, and effort as traditional artwork. The medium notwithstanding, each artist must still master their tools.
While all the rage in the last several years, digital art has been around for a while. As far back as the 1960s, tablets have been employed to communicate illustrations and instructions to computers. It was Ivan Sutherland’s Sketchpad app that made way for contemporary computer-aided design software.
Harold Cohen, who created the AARON computer art program to create illustrations using a robotic device, is another noted pioneer in digital drawing. These drawings, starting around 50 years ago, subsequently grew from abstracts to pieces that were more representational.
Adobe’s Illustrator, still in use today, was released in 1987, permitting Mac computer users to create curves and shapes utilizing mathematical control points.
Specific paint programs released during the 1980s lured a number of major artists including Andy Warhol, who sparked an uproar when he digitally modified an image of pop vocalist Debbie Harry.
Digital artists would enjoy even more creative freedom in the 1990s, as computer software became more advanced, adding layering and 3D functionality.
There are some prominent examples of digital artistry. It was back in the 1970s when David Hockney, for instance, made the leap to digital paintings, citing the convenience and artistic capabilities of digital software. He used Paintbox software throughout the 1980s, and during the 2000s, created what became a well-known painting series on his iPad and iPhone.
Hockney’s “Yosemite Suite” (2010) is a series of iPhone paintings and drawings inspired by Yosemite National Park, with landscapes offering peeks at boulders, redwoods, streams, and valleys.
Then there is “Untitled Computer Drawing” (1982), a Harold Cohen computer program creation of abstract and sparse human-like forms. Cohen, in his day, created a host of innovative digital drawings.
There is also the famous “Untitled Computer Assisted Drawing” (1975) by Paul Brown, who created a series of computer-assisted dense patterns. In 1984, Brown founded the UK’s National Centre for Computer Aided Art and Design.
Aiste Stancikaite and Sara Lundy are other digital icons known for innovating digital techniques. In the last few years, there have also been digital “immersive” exhibits in which traditional works from artists such as Vincent Van Gogh are digitized, permitting a wider audience.
Interest is only increasing in the medium, with new artists constantly emerging. Jasmine Liaw, for example, was a winner of the 2023 Emerging Digital Artists Award (EDAA). Liaw, who works in dance performance, experimental film, and new media, used bodies composed of 3D-rendered cultural objects in her winning work to tell the stories of her elders.
Another EDAA winner is Bomi Yook, a Korean-Canadian artist working in computer-generated immersive media, video performance, and experimental animation. She used experimental 3D animation in their “K-COSMOSIS” piece, along with procedurally generated particle systems, to invite viewers to view the world through osmosis to uncover profound connection and sharedness.
Just two years ago, the global art market reached $65 billion in aggregate sales, a 29% increase from the year before, according to the 2022 Global Art Market. And it is no wonder: as an asset, art value is not linked to stock market performance, so artwork can offer stability during times of inflation or other volatility.
Investors looking to add art to their portfolio these days have more options than ever, including through non-fungible tokens as well as Yieldstreet, which to date has had nearly $4 billion invested on its private-market alternative platform.
Among its curated and highly vetted opportunities – which include asset classes such as transportation, private credit, and real estate – are art equity funds that offer fractional ownership with minimum buy-ins as low as $10,000.
In addition to the possibility of steady returns, investing in art can also help mitigate overall portfolio risk through diversification, which is essential to long-term successful investing. Alternative investments can be a good way to help accomplish this.
Traditional portfolio asset allocation envisages a 60% public stock and 40% fixed income allocation. However, a more balanced 60/20/20 or 50/30/20 split, incorporating alternative assets, may make a portfolio less sensitive to public market short-term swings.
Real estate, private equity, venture capital, digital assets, precious metals and collectibles are among the asset classes deemed “alternative investments.” Broadly speaking, such investments tend to be less connected to public equity, and thus offer potential for diversification. Of course, like traditional investments, it is important to remember that alternatives also entail a degree of risk.
In some cases, this risk can be greater than that of traditional investments.
This is why these asset classes were traditionally accessible only to an exclusive base of wealthy individuals and institutional investors buying in at very high minimums — often between $500,000 and $1 million. These people were considered to be more capable of weathering losses of that magnitude, should the investments underperform.
However, Yieldstreet has opened a number of carefully curated alternative investment strategies to all investors. While the risk is still there, the company offers help in capitalizing on areas such as real estate, legal finance, art finance and structured notes — as well as a wide range of other unique alternative investments.
Moreover, investors can get started with a relatively small amount of capital. Yieldstreet has opportunities across a broad range of asset classes, offering a variety of yields and durations, with minimum investments as low as $10,000.
The popularity of digital art continues to rise due to advantages such as accessibility and efficiency. Also increasingly popular is art as an investment, as the asset class can protect against volatility, diversify portfolios, and potentially provide regular income.
Yieldstreet provides access to alternative investments previously reserved only for institutions and the ultra-wealthy. Our mission is to help millions of people generate $3 billion of income outside the traditional public markets by 2025. We are committed to making financial products more inclusive by creating a modern investment portfolio.