The latest crypto token craze is spilling over into watches.
After a spate of record prices for digital assets from works of art to sneakers, the first NFT watch – or “non-fungible token” verified by blockchain technology – was offered earlier this month. It was not sold and the auction was extended.
However, other NFT prices obtained on online platforms and by traditional auction houses seem to signal that NFTs are attracting investors and creating new ways to own or just enjoy watches as dematerialized assets. Further NTF auctions are planned.
The first watch NFT launched was the Bigger Bang All Black Tourbillon Chronograph specialty piece offered by Jean-Claude Biver, the industry veteran who retired to take the opportunity to make history.
“What we’re doing today is a world first that will have wings,” Biver said in a Zoom presentation on March 30 at the start of the original six-day auction. “We are at the beginning of something great.”
[“Still Don’t Get What an NTF Is?” Here’s a quick explanation.]
Mr. Bivers NFT was a digital photo – called a “digital twin” – that he took of the prototype of the Hublot Bigger Bang All Black Tourbillon Chronograph in his private collection. (“I would never sell the watch,” he said. “It’s a real reference and the genesis of every model Hublot has made since 2005.”)
It was accompanied by a codographic signature with a code stamp, which documented the authenticity and origin of the image. Such tokens live in a blockchain, a digital ledger that is used in cryptocurrencies such as Bitcoin or Ethereum.
Mr. Biver has made many “firsts” in his 43-year career, particularly in 2015 when, as Managing Director of TAG Heuer, he secured an unprecedented collaboration with Google and Intel to bring Silicon Valley technology to the brand’s first connection Swiss watchmaking to bring watches.
Presumably also in the emerging NFT market it is important to be “first”, which would explain the last minute maneuvering for differentiating the watch world.
On March 25, the Jacob & Company watch brand announced that it would offer the first NFT watch on the new ArtGrails platform. (The piece, an exclusively digital SF24 Tourbillon Piece Unique, went on sale on April 4, but it was suspended and started again as a new auction that ended Thursday.)
On March 30th, Mr. Biver started his auction on the OpenSea platform with the help of Carlos Moreira, founder and managing director of WISeKey International Holding, a Geneva-based cybersecurity company. A huge picture of Mr. Biver and Mr. Moreira flashed on the Nasdaq MarketSite in Times Square to let everyone know that the auction had started.
But five days later, only three commandments were seen – 1 ether, which was about $ 2,078 as of April 5; 1.05 ether, or about $ 2,182; and 25 ethers, or about $ 51,961 – none of which met the undisclosed reserve price. Now the auction has been extended until April 30th.
The Jacob & Company NFT was a 3-D animation produced by the brand and inspired by their Epic SF24 travel clock. However, it has two additional features that make it a bespoke digital creation: a tourbillon and a split-flap system called 10 cryptocurrencies.
“Our NFT watch is a purely digital, tokenized asset that only exists in digital space,” said Benjamin Arabov, CEO of Jacob & Company, during a video interview on March 30th from New York.
On April 5, one day after the auction started, “there were so many bidders that the platform couldn’t handle it and crashed,” said Arabov. “It got to $ 3.1 million and then it all collapsed.”
Sales resumed on April 7, this time for a 24-hour period to reduce the risk of “hackers,” Arabov said. The final price was 50.74 ethers, or about $ 100,000.
“Many of my collector’s clients are fascinated by NFTs because they are new and different,” said Avery Andon, art dealer and founder of the NFT platform ArtGrails, in a video interview from Miami. “But NFTs will take some getting used to.”
Will watch collectors tend to buy digital watches tied to a blockchain token without ever owning an actual watch?
“NFTs derive their value from their scarcity,” Andon said. “This Jacob & Company NFT is the only one in the world and serious watch and NFT collectors see an inherent value in it.”
And Mr Arabov said: “Most watch collectors keep 99 percent of their watches in the safe anyway.”
In addition to the assurance of origin and scarcity, the Jacob & Company NFT was sold with a certain tradition of buying watches: a paper certificate and a storage box with a hard drive to store the NFT.
“As a watch collector, I love the experience of the box and the papers,” Andon said. “That’s why we’ve repeated this physical experience here, except that you don’t get a watch, just this very rare mark.”
With more investors looking to digital riches, the volume of global NFT businesses topped $ 500 million in March, up from $ 240 million this month alone. Watch auctioneers just come into play.
On April 23, Sotheby’s is slated to be the first major auction house to sell an NFT watch when a Ressence Spymaster goes up for sale in Hong Kong along with its NFT, a computer-generated video of the watch.
“The NFT digital video accompanying the watch seems just the right way to emphasize its true worth,” said Sam Hines, Sotheby’s Head of Watch, in a press release.
And on the same day Phillips is supposed to sell a digital work of art called “Replicator” by the artist Mad Dog Jones, whose real name is Michah Dowbak. It is described that the item listed in an online auction can be reproduced every 28 days, resulting in seven generations of works of art.
The auction house was also “approached to sell tokenized watches, a request we take very seriously,” said Arthur Touchot, head of digital strategy at Phillips, based in Geneva.
Whether NFTs will become a turning point in the watch market or a bubble inflated by abstract financial systems, only time will tell.
But Mr. Arabov of Jacob & Company said watch NFTs would help push the boundaries of creativity by freeing watchmakers from material constraints. And, he said, his company is already planning to showcase an entire NFT collection that will be “far more creative than any real watch” but “will live entirely in the NFT world”.
If Augmented Reality watch NFTs like Gucci’s Virtual 25 sneakers became “wearable”, it wouldn’t be hard to imagine fans trying to own the digital version of an otherwise inaccessible watch – like a Patek Philippe Nautilus or Paul Newman’s Rolex Daytona – That this could be “worn” and boasted, if only on social media.
“This sale should get people to pay attention to NFTs,” said Arabov. “It’s not about whether NFTs have a place in watches, but when and when.”