Why Fractional Investments Are The Future

Investing BY Ankita Dec 12, 2023
Fractional Investments Are The Future

Art is no longer confined to art galleries, and emerging art communities are giving new generations of artists a chance to gain exposure and grow their network. The line between fine arts and the high-tech market is blurred. We live in a time where the exclusivity of the conventional art scene is being phased out, and new technologies such as the blockchain or AI-infused platforms are enabling inclusivity.

Amid this era where our natural need for creativity is intertwined with the need to drive exposure and generate capital, a revolutionary concept is taking center stage – fractional investments in art. Gone are the days when art investment was solely the domain of the elite. The surge of fractional ownership platforms is democratizing the art world, giving way to collectors, connoisseurs, and investors of all sizes to own fragments of art pieces. The brushstrokes of the past are being redrawn with lines of code, as technology bridges the gap between Van Gogh and the public, between Klimt and the modern investor.

Challenging The Status Quo

As an investment, fractional art has pushed toward a paradigm shift in the world of art ownership and investment. In just a few short years, it has transcended from a left-field concept to a flourishing industry, with more than half a million worth of art already changing hands fractionally since its inception in 2017. The growth has been astounding, with more than a third of this total occurring in the span of a single year – 2022. While this sum represents a mere fraction of the global art market, it’s the trajectory that speaks volumes.

Currently, there are over 20 platforms, with more popping up. Most of them are based in the US, and the startups offer a unique approach to art investment. Industry trailblazers like Masterworks focus on fine art investment, while other startups like Yieldstreet, have widened their reach by offering a diverse array of assets ranging from vintage cars to fine wines.

Democratization At Its Core

Traditionally, art ownership was often confined to the privileged few, those with deep pockets and access to an exclusive world of art dealerships. This is where fractional investment comes in. The concept has torn down these ()visible barriers, opening the doors to a broader spectrum of art lovers and investors to partake in this once-exclusive club. From the seasoned collector to the newbie investor looking to dip their toes into the world of art, “come one, come all” is what fractional ownership is all about. It’s not only altering the way the art marketplace, but it’s also redefining the way we experience it.

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Nowhere To Go But Up

While global art sales have witnessed a slowdown, fractional art ownership is carving its vibrant niche. The phenomenon of fractional art investment is not only persevering but flourishing, defying market trends and opening new avenues for art enthusiasts and investors alike. A recent report (from London-based ArtTactic) underscores this surge, noting that the allure of fractional ownership investments in art and collectibles remains undiminished.

According to the report, individual investors appear to be increasingly interested in buying fractions of artworks. A separate report in April focusing on online art buying found that even though only 9% of art collectors surveyed had bought fractional shares, 61% said they likely would in the next 12 months. Nearly half of those surveyed have collected art for more than 10 years.

Painting The Road Ahead

As these platforms mature, as the interface between traditional and technological progress intensifies, the notion of art investment continues to transform and evolve. It’s a metamorphosis that goes beyond investment portfolios. It’s a complete shift that redefines how we as a society engage with art, culture, and the very essence of creative freedom.

The future of fractional ownership stands not only as a testament to our evolving relationship with art but also as a testament to the neverending connection between innovation and human aspiration. We find ourselves poised on the cusp of a renaissance – a renaissance defined not only by brushstrokes on canvases but by the marks of progress on the tapestry of time.

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Ankita Tripathy loves to write about food and the Hallyu Wave in particular. During her free time, she enjoys looking at the sky or reading books while sipping a cup of hot coffee. Her favourite niches are food, music, lifestyle, travel, and Korean Pop music and drama.

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