Sotheby’s is one of the biggest and oldest auction houses in the world. On May 19, it confirmed the auction of seven NFTs that belonged to the bankrupt crypto hedge fund, Three Arrows Capital (3AC).
This auction saw the collection of digital art pieces being sold for an attractive sum of nearly $2.5 million. The auspicious event was a confirmation of the continuing relevance and value of NFTs, even as their original owning entity collapsed.
Attention Is On Fidenza #725
One among the seven auctioned nonfungible tokens stood out and it was a digital piece known as “Fidenza #725“. This digital art, design with its distinct composition of graphic curves and dashes displayed in a muted palette of yellow, cream, black, and pink, was the showstopper at the auction. It attracted the highest bid but was ultimately sold for a staggering sum of more than $1 million.
Three Arrows Capital (3AC) acquired the piece for 135 Ether in 2021, which was valued at around $341,786 at the time. It means that the selling price at the auction translated to a nearly threefold increase from the original purchase price, highlighting the possible profitability of the NFT market.
Three Arrows Capital Filed For Bankruptcy
The auction of 3AC’s nonfungible tokens was part of a major liquidation process for the embattled hedge fund. Based on a memo released in February 2023 by Teneo, one of the court-appointed liquidators, 3AC’s assets were set for liquidation after its bankruptcy filing.
Operating from Singapore, 3AC had the infamous recognition of being the first major crypto company to declare bankruptcy in 2022. The company was specifically hard-hit by the extensive meltdown of two cryptos, TerraUSD and Luna, which resulted in its ultimate bankruptcy filing in the British Virgin Islands in late June 2022.
When this company declared bankruptcy, it estimated its cumulative assets to be nearly $1 billion. Almost $22 million of the assets were connected to the company’s huge collection of nonfungible tokens.
The Larger Scenario
The successful auction of 3AC’s NFTs indicates there is resilience and inherent value in the digital assets, even as the downside trend in the crypto and digital assets space threatens to return. Despite the bankruptcy filed by 3AC, the significant prices recorded at the auction represent the potential value the digital assets continue to hold in the marketplace.
Furthermore, the event proves the volatile nature of crypto and digital art markets. In that context, the involvement of traditional firms like Sotehby’s in the process of auctioning NFTs indicates an increasing acceptance and incorporation of digital assets into mainstream culture.