Sotheby’s, one of the world’s oldest and largest auction houses, announced on Friday the auction of seven NFTs that belonged to the bankrupt cryptocurrency hedge fund, Three Arrows Capital (3AC). The auction saw the collection of digital art pieces being sold for an impressive sum of approximately $2.5 million. This significant event was a testament to the continuing relevance and value of NFTs, even amid the collapse of their original owning entity.
Of the seven auctioned NFTs, one that stood out was a digital piece titled “Fidenza #725”. This digital art, with its unique composition of graphic dashes and curves displayed in a muted palette of cream, yellow, pink, and black, was the showstopper. It not only attracted the highest bid but was eventually sold for a whopping sum of over $1 million. Three Arrows Capital had purchased this piece for 135 Ether in 2021, which was approximately equal to about $341,786 at that time. This means that the selling price at the auction represented an almost threefold increase from the original purchase price, highlighting the potential profitability of the NFT market.
Background on the Bankrupt Cryptocurrency Hedge Fund
The auction of 3AC’s NFTs was part of the broader liquidation process for the hedge fund. According to a memo released in February by Teneo, one of the court-appointed liquidators, 3AC’s assets were being liquidated following its bankruptcy filing. Based in Singapore, 3AC had the unfortunate recognition of being the first significant cryptocurrency firm to declare bankruptcy in 2022. The firm was particularly hard-hit by the severe downturn of two cryptocurrencies – Luna and TerraUSD, which led to its eventual bankruptcy filing in the British Virgin Islands in late June 2022.
When Three Arrows Capital declared bankruptcy, it estimated its total assets to be around $1 billion. Approximately $22 million of these assets were linked to the firm’s extensive collection of NFTs.
Takeaway from the Auction
The successful auction of 3AC’s NFTs demonstrates the resilience and inherent value of these digital assets, even amidst challenging circumstances. Despite the bankruptcy of 3AC, the considerable prices realized at the auction highlight the potential value that digital assets continue to hold in the marketplace. Moreover, this event underscores the volatile nature of the cryptocurrency and digital art markets. The involvement of traditional institutions like Sotheby’s in the auctioning of NFTs signals a growing acceptance and integration of these digital assets into mainstream culture.
The auction of NFTs owned by bankrupt cryptocurrency hedge fund Three Arrows Capital at Sotheby’s saw the collection of digital art pieces being sold for an impressive sum of approximately $2.5 million. Of the seven auctioned NFTs, one that stood out was a digital piece titled “Fidenza #725”. This digital art was eventually sold for a whopping sum of over $1 million. The successful auction demonstrates the resilience and inherent value of these digital assets, even amidst challenging circumstances. The involvement of traditional institutions like Sotheby’s in the auctioning of NFTs signals a growing acceptance and integration of these digital assets into mainstream culture.