Shopping for priceless art at auction with virtual money is fast becoming a reality. Earlier this year, Christie’s accepted payment by cryptocurrency on the vast majority of lots – about 93% – in an auction dedicated to art created by artificial intelligence. It’s a transactional breakthrough that will be welcomed by many, especially young, tech-savvy art investors, yet others are still to be convinced of digital currency’s durability, and highlight its potential risks.

Cryptocurrency was first used as payment for a physical artwork at a major auction house four years ago, according to Michael Bouhanna, Sotheby’s Head of Digital Art and NFTs in New York. The sale in question, in May 2021, involved the quintessential Banksy painting Love is in the Air, with Sotheby’s providing the option to pay in Bitcoin (BTC) or Ether (ETH) via the Coinbase exchange.

“We made a decision to accept cryptocurrency for selected physical works in 2021 in response to the evolving art market and to attract an additional pool of collectors,” says Bouhanna of this pioneering initiative. “We were noticing an increasing appetite among collectors – many of a younger generation – for seamless payment options when doing business with us, and for many, this provided another method to participate in our sales.”

Confidence in Compliance

As with any other payment at auction, compliance checks and due diligence for crypto transactions are rigorous and all-important, especially given that the sums involved can be astronomical, equivalent to millions of US dollars. “Crypto is no different from any of the other currencies we accept, and all transactions are subject to applicable laws and regulations in whichever currency they choose to pay in,” states Bouhanna.

He adds that Sotheby’s has been accepting crypto for some time now on individual lots and groups of works, and the auction house will continue to offer it as an option when it makes sense. “It’s important that everyone who transacts with us [in virtual currency] feels as welcome in our world as any other client,” he says.

Other auction houses are getting in on the act, too. Phillips Hong Kong accepts crypto on certain occasions when it is perceived to be a fit. During Hong Kong Art Week 2025, payment by crypto was offered for a Spaces digital art exhibition of eclectic works reflecting upon the intersection of art, technology and impermanence.

Not all auction houses have taken up the crypto baton, though. Bonham’s indicated that its policy at this juncture is not to accept cryptocurrency as a form of payment.

Tapping into New Wealth

Sean Hung, founder and CEO of fintech platform Acwires, can see the logic in auction houses beginning to accept crypto, aligning with how young collectors want to transact. “Over the past decade, there’s also been a lot of new wealth generated from cryptocurrency-related businesses such as service operation, trading, decentralised applications, et cetera. They are part of the new wave of collectors that auction houses would like to target,” he says.

The digital currency expert believes the future lies in convergence between crypto and traditional finance, between accessibility and compliance. Acwires allows users to buy and sell crypto with their credit card, regardless of jurisdiction and currency, and previously he helped to build Diginex, which became the first crypto exchange to list on Nasdaq.

Regulatory Clarity

He is convinced that as regulatory clarity improves and infrastructure evolves, crypto will become part of everyday commerce. “We are already seeing a shift as mainstream payment companies and banks have started working closely with crypto service providers,” he notes.

As Hung shares, blockchain transactions are inherently transparent – but pseudonymous. “The transaction is visible, but the identity behind a wallet isn’t public unless disclosed,” he says. “We still have to rely on traditional KYC [Know Your Customer] procedures to attach a wallet to the actual buyer’s identity.” He adds that there are forensics firms able to trace a wallet’s previous transactions to identify if it has been associated with suspicious activities.

Some financial commentators have suggested it is possible to evade a blockchain’s transparency through crypto mixers. Hung says leading platforms and regulated payment providers screen for such activity, and the focus now is on building infrastructure that is compliant with anti-money laundering standards through traditional KYC, and also KYT (Know Your Token) policies.

Risks and Rewards

Sam Kima, Senior Vice-President of First Gold, believes Sotheby’s and Christie’s adoption of cryptocurrency is a calculated bet to future-proof its business, attract crypto-rich collectors, and streamline transactions. By accepting crypto taps, the auction houses connect with a new class of wealthy buyers who prefer transacting in digital assets rather than liquidating them for fiat currency – which, notes Kima, can trigger tax events. He also suggests that some buyers prefer the pseudonymous nature of crypto for discreet transactions, especially in high-profile sales.

Regarding the potential risks and challenges of transactions made in virtual currency, Kima warns: “Crypto prices can swing dramatically, creating uncertainty for both buyers and sellers. Some cryptocurrencies, for example Bitcoin, have high energy consumption, clashing with sustainability goals.” In addition, he foresees that regulatory uncertainty could complicate compliance.

“Cryptocurrency in auctions is a natural evolution, aligning with digital finance trends; however, its long-term success depends on stablecoins [pegged to another asset to mitigate volatility] and clearer regulations,” he says. “If managed wisely, it could democratise art investing, but risks remain.”

Trust Issues

According to Wojtek Paczos, Senior Lecturer in Economics at Cardiff University, cryptocurrencies payment systems operate on the basis of a fundamental mistrust. He says: “Nobody trusts anyone, so the record of transactions must be decentralised: it is kept in millions of copies all over the internet in a so-called ‘ledger’. The fact that it’s decentralised makes it economically inefficient.”

In his view, for crypto to become a viable means of payment like a standard currency, it must be a unit of account, a store of value, and a medium of exchange. “Cryptocurrencies fail badly across all three [of these qualifying] tests: nobody quotes prices in bitcoins, the set of goods purchasable with bitcoin is severely limited, and the fluctuations in value against traditional currencies render bitcoin an unstable store of value.”

He believes crypto is highly volatile because it is built on this basis of mistrust and lacks a safety net to prop up its demand, such as by paying taxes via the currency.  “In cryptocurrencies, the demand might simply disappear one day, and there is no formal backstop,” he says.

Scam Alert

The image of crypto has undoubtedly been tarnished by incidents of scamming and hacking. Coinbase, one of the world’s biggest cryptocurrency exchanges, was hit by a cyberattack last month that is likely to cost it as much as US$400 million. Reportedly, the company refused to pay a bribe demanded by the hackers and has promised to reimburse every client who got scammed.

Bill Lee, Chief Technology Officer of Web3 pioneer DualMint says the promise of crypto technology has been undermined by a flood of scams, rug pulls and exploitative projects. “To combat this, both the industry and regulators are stepping up,” he shares. 

DualMint emerged as a response to fundamental issues within the current digital ecosystem like ownership, control and transparency.  Offering some measure of reassurance, Lee says: “Within the space, there’s a growing emphasis on auditing, code transparency and self-regulatory standards, such as those promoted by organisations like the Blockchain Association and [blockchain analytics firm] Chainalysis.”

As digital-currency tech evolves and improves, collectors at auction can take heart in the virtual reality of securing a beloved work of art without paying through notes.