Institutional FOMO Drove NFT Rush
Duncan Cock Foster, co-founder of Nifty Gateway, on NFTs as luxury goods
The first wave of institutional NFT activity was mostly demand chasing, not medium building. Auction houses moved fast because they already know how to sell scarce collectibles to wealthy buyers, while museums moved slowly because they need to decide what belongs in art history. That split explains why some players rushed into NFT sales in 2021 and 2022, then pulled back, while others kept studying on chain art and started making selective acquisitions later.
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Sotheby's and Christie's were early because NFTs fit their existing sales machine. They could list a tokenized work, market it to collectors, take a commission, and move on, just as they do with sneakers, streetwear, or other new collectible categories. Sotheby's first NFT sale with Pak was in April 2021, and Christie's had already begun NFT sales in 2020.
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Museums operate on a different clock. LACMA announced in February 2023 that it had acquired the first and largest collection of blockchain artworks to enter an American art museum. That is not a trading event, it is a curatorial decision that says certain on chain works matter enough to preserve, study, and show for decades.
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The kind of NFT work that has held up best is the work that could not exist in older formats, especially generative art and other internet native pieces where the code, provenance, and collector interaction are part of the artwork itself. That helps explain why institutions that stayed engaged focused more on understanding the medium than on chasing the next sale.
From here, institutional adoption should look slower and more durable. The winners will be museums, marketplaces, and artists that treat NFTs as a new artistic medium with its own curatorial standards, not as a temporary auction category. As more institutions collect on chain and generative works deliberately, NFT art should become less boom and bust commerce and more part of the permanent art canon.