The New Frontier for Investors in the Digital Art Market

Key Takeaways

• Digital art is a burgeoning subgenre that is essentially any artwork that employs digital technology in the creative process.

• While digital artists and graphic designers do share some commonalities, the two are often incorrectly used interchangeably.

• The emergence of NFT art, or crypto art, has seen many more investors and collectors getting in on what can be consistent and considerable returns, risks notwithstanding.

In an increasingly online world, digital art is a burgeoning subgenre that essentially is any artwork that employs digital technology in the creative process. Such art covers everything from electronic paintings and digital drawings to iPhone sketches and videos. If it is crafted, enhanced, or exhibited digitally, it is digital art, in which many investors are interested.

But what exactly is a digital artist?

What is a Digital Artist?

Whether they are an illustrator, animator, game designer, film producer, web designer, advertiser, digital painter, or have some other title, a digital artist basically creates art using a computer and software programs as their chief tools.

How Do Digital Artists Create Art Pieces?

While traditional artists typically require a studio filled with canvasses and other materials, digital artists can create artworks with tools as simple as smartphone and laptops, switching between colors and tools with just a few clicks.

Some artists use digital applications to paint, draw, model, and create whole works, while others scan and edit physical pieces via computer programs. There are many different kinds of software programs for such work, with the most common including Adobe Creative Cloud, Adobe InDesign, Photoshop, and Adobe Illustrator. Those who work in animation often use Harmony and Maya for 2D and 3D effects.

Then there are digital artists who produce art that is wholly computer generated, using fractals, data, and algorithms.

Digital Artists vs. Graphic Designers

While digital artists and graphic designers do share some commonalities, the two are often incorrectly used interchangeably. The primary difference is that the digital artist’s primary focus is art, while the graphic designer concentrates on communicating a message. To do so, they use various images, graphics, fonts, and sometimes sound.

Meanwhile, digital artists have several career options, many of which involve designing animated images and visual effects for media such as computer games and videos. Whatever the role, digital artists use computer software to enliven their art. The art may then become three-dimensional interactive graphics for visual characters or websites, depending on the artist’s particular field.

Who Are Some of the Most Popular Digital Artists Today?

These days, there is no shortage of prominent digital artists around the world. Here are a few:

• Jonathan Quintin, known as mbsjq, of the United Kingdom. Self-described as an impressionist at heart, but a surrealist in execution, mbsjq is a crypto and concept artist who is enthralled with surrealist philosophy and the cosmos aesthetic, which shows in his work.
• The Rusted Pixel, also known as Paul, of Ireland. This 3D designer has done projects for companies such as MTV, Spotify, Google, Disney, and Adobe. He is perhaps most known and admired for the fairytale-like stories and characters he creates, which derive from the coastline and countryside of his hometown of Donegal.
• Ori Toor, of Israel. According to this illustrator, he creates worlds to get lost in. Toor is an inveterate “doodler” who draws freestyle fantasy plots and characters. Such improvisation allows him to get the most from his flow of imagination, which produces abstractions, psychedelic compositions, sci-fi art, and more.
• Matt Schu, of the United States. This digital artist and illustrator is passionate about drawing houses and loves to capture their mood as well as their gardens. In fact, his art focuses on objects’ meaning, emotion, and inspiration. Humans rarely appear in his pieces.
• Butcher Billy, of Brazil. This graphic designer and digital illustrator mixes his vision of comics art with Pop Art with a twist. Through his digital art, he reimagines popular comics stories and cinematographic icons; he recently made a splash with his Post-Punk Marvels series.
• Andre Ducci, of Italy. This artist and writer is one of the top digital artists that uses a technique that creates absurd illustrations based on throw-back aesthetics. In fact, his art – posters and book illustrations, primarily – provides tours of the Roaring Twenties through to the 1960s.
• Marija Tiurina, of the United Kingdom. Rather than forbidding medieval aesthetics, Tiurina draws vital, joyful, lively paintings replete with multiple plots and lots of characters on a single canvas. She is considered one of the best at this style.
• Antoni Tudisco, of Germany. This creative director and 3D artist has a style that features smooth 3D shapes and textures in bright colors, from gold to neon pink. A modern surrealist in the NFT world, he has worked with numerous large corporations such as Adidas and Mercedes-Benz, and has garnered several prestigious design awards
• Mandy Jurgens of Germany. This illustrator plays with color and texture to influence emotions. Created in Procreate and Photoshop, Jurgens’ works are typically in shades of purple and yellow, which she uses to focus the viewer’s gaze.
• Irina French, of the United Kingdom. The freelance digital artist mainly does astounding character illustrations inspired by Dungeons and Dragons and anything fantasy. A chief goal is to one day produce illustrations for a board game.

What are Examples of Investment-Worthy Digital Art?

The emergence of NFT art, or crypto art, has seen many more investors and collectors and getting in on what can be consistent and considerable returns, risks notwithstanding. In 2019, for example, Trevor Jones, a traditional artist who had recently entered the crypto art space, sold a digital painting called “EthGirl”l for the equivalent of $10,000. Two years later, the piece was valued at more than $8 million.

A prime representative of investment-worthy digital at is NFT artist Mike Winkelman, also known as Beeple, who has sold some his digital artwork for tens of millions of dollars. Besides being known for selling the most expensive NFT, the U.S.-based artist is also famous for creating 3D art with a dystopian affect.

How Else Can I Invest in Art?

Once the province of the monied class, investors are increasingly turning to art as a hedge against stock market volatility and currency devaluation. Further, art’s value is not significantly impacted by global economic conditions.

Digitization has surely made art more accessible, driven in part by online auction houses, market data, catalogs, fairs, and investment platforms that offer curated opportunities with low minimums buy-ins.

Digitization has also improved market transparency. For example, investing in art is less risky these days since one can easily check and tracking provenance, pricing, and various other elements.

However, beyond digital art, there are several other ways to invest in art, including by purchasing physical works such as paintings and sculptures. In the last 25 years, contemporary art has performed better than the S&P 500, returning 14% annually versus 9.5% for the index.

Investors can also go through art funds — privately held entities that generate returns by purchasing, holding, and selling art works over the fund’s lifecycle. The fund manager calls the shots, in terms of what to buy and when to sell, relieving the investor of having to make such decisions. There is also fractional art investing, which basically allows investors to purchase shares of art rather than buying entire physical works outright.

Investing in art is also becoming a common and widely accepted way to diversify portfolios, which can markedly mitigate investment risk.

Alternative Investments and Portfolio Diversification

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, that meant the potentially exceptional gains these investments presented were also limited to these groups.

To democratize these opportunities, 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. Learn more about the ways Yieldstreet can help diversify and grow portfolios.

Summary

Digital art is growing and will likely cause more disruption as it generates artworks in which investors may be interested. After all, investing in art – digital or otherwise — is an effective way to diversify one’s portfolio, which is key to investing success.

All securities involve risk and may result in significant losses. Alternative investments involve specific risks that may be greater than those associated with traditional investments; are not suitable for all clients; and intended for experienced and sophisticated investors who meet specific suitability requirements and are willing to bear the high economic risks of the investment. Investments of this type may engage in speculative investment practices; carry additional risk of loss, including possibility of partial or total loss of invested capital, due to the nature and volatility of the underlying investments; and are generally considered to be illiquid due to restrictive repurchase procedures. These investments may also involve different regulatory and reporting requirements, complex tax structures, and delays in distributing important tax information. Diversification does not ensure a profit or protect against a loss in a declining market.