Beeple NFT Fetches Record-Breaking $69 Million in Christie’s Sale

The sale could prove a watershed moment for crypto asset markets as well as an art world suddenly obsessed with NFTs, even as many top collectors and dealers admit they are still figuring out what the digital trademarks do.

NFTs incorporate technology similar to bitcoin, the decade-old digital currency, albeit with a key difference: Whereas one bitcoin is exchangeable with another bitcoin, each NFT serves as a singularly unique marker for the digital asset it tags. NFTs are also being used by tech giants like Twitter founder Jack Dorsey, who recently turned his very first tweet into an NFT, and the NBA. A trading-card like video NFT of LeBron James dunking a basketball recently sold for over $200,000.

The winner of Beeple’s 2021 piece, “Everydays: The First 5,000 Days,” will receive the image along with its unique token, which will be sent to the winner’s address—the unique identifier for a cryptocurrency account. This token will convey ownership from the artist to its new owner.

This same token will be recorded on a digital ledger known as a blockchain that will store details about the work’s creation along with its new owner (not yet divulged) and any future owners should it get resold. In the same way an artist’s signature and ownership history helps authenticate a painting, the NFT on this $69.3 million image will ensure it remains certified in perpetuity. Copies of the same image uploaded elsewhere will not.

The Wisconsin-born artist, whose name Beeple nods to an 1980s yeti-like monster toy, said he was clueless about NFTs until last fall when he was tipped to the format’s popularity among cryptocurrency investors. He doesn’t have ties to a traditional gallery. “People describe it as falling down a rabbit hole,” he said in an interview before the sale, “and that is quite accurate.”

His piece, which elicited 353 bids over the course of the 15-day auction, depicts an amalgam of political cartoons and lush, videogame-like scenes that the 39-year-old artist created over slightly more than 13 years, completing one new work each day. Christie’s said the resulting mashup will remain intact; its owner will be able to zoom in to see the 5,000 individual artworks that make up the collage—from endearing early portraits of Beeple’s uncle to post-apocalyptic fantasies of cyborgs and a lactating Michael Jackson—but the works can’t be broken up and sold individually.

Christie’s expert Noah Davis said NFT art is still so new that the house didn’t put an estimate on the work, the artist’s first top-tier auction appearance. Mr. Davis was introduced to the artist after Beeple sold a small group of his NFT artworks online for $3.5 million three months ago on a platform called Nifty Gateway. Beeple followed up last month by selling another tokenized artwork online for $6.6 million. Christie’s said it decided to accept cryptocurrency for the first time with this sale, but it’s unclear yet if the winner paid that way or with cash.

The sale could “push traditional artists to think about how they could do interesting things with their work in a digital way,” the artist said, “and I think it’s going to push digital artists like myself to think of how they can come into the physical realm.”

Certainly his arrival on the art scene—and the NFT art phenomenon overall—is churning up the kind of feverish ebullience, and brewing backlash, that’s largely been absent from the art scene amid the pandemic. Now, it’s all anybody in art circles can talk about, on the Clubhouse app and beyond. The artist moderated his own “closing party” chat on the app the morning of the sale, and one of the members of his panel was Jehan Chu, longtime collector and co-founder of a cryptocurrency venture-capital firm. During the forum, Mr. Chu said, “I think there was a malaise in the art world, but now everyone is excited again–and it’s because of this.”

Minutes later in the chat, when the artist was informed that bidding had surpassed $20 million, he laughed and said, “I feel super lucky. I didn’t see this coming.”

Others needed more persuading. “It’s a pure hype play,” Steven Sacks, founder and director of the New York gallery, bitforms, said a few days before the Beeple sale. Mr. Sacks said he shows digital artists who have been experimenting with new media since the 1960s, and while some of them have sold room-filling installations for over $1 million, the more common price level hovers under $100,000, he said. Last week, former Christie’s auctioneer Loïc Gouzer posted an image on Instagram of an Amy Sillman painting he offered for sale on his Fair Warning app, reminding people that was “created in the physical world” and tagging it #notnft.

Mike Steib, chief executive of the art marketplace Artsy, said the novelty of NFTs could be fueling much of the frenzy. Beeple had a reputation as a popular digital artist ahead of this sale, with nearly 2 million Instagram followers. “Will collectors still be this excited when the houses are offering up the 520th edition of the 27th most-popular NFT artist?” Mr. Steib said.

Kathleen Breitman, co-founder of the cryptocurrency Tezos, said private equity funds with deep investments in cryptocurrency are also likely behind the NFT art rush, as are individual investors with “ether to burn,” referring to the bitcoin alternative. If NFT art is to evolve, the space will need to draw in established artists with curatorial followings and galleries, many of whom remain wary of joining the fray.

Mr. Sacks, the dealer, said he’s open to rethinking the NFT phenomenon, especially if his artists see creative potential in it. Two of his artists, Refik Anadol and Jonathan Monaghan, recently created tokenized works of their own to upload and sell. Mr. Anadol quickly sold 300 editions of a work, at $1,000 apiece. (His small video sculptures in the gallery typically sell in editions of five for $35,000 each.)

What’s more, a man who lost his bid for one of Mr. Monaghan’s surreal portraits on an NFT art platform wound up stopping by the gallery last week—in person. “That’s what we want,” the dealer said.