Red-chip versus Blue-chip: What art should I invest in?

Blue-chip artists have always had the reputation of being the most lucrative form of fine art investment, however in recent years emerging painters and sculptors have been dwarfing their estimates.

The COVID pandemic had a huge impact on all markets worldwide, including in fine art. Many investors sought to diversify their holdings by purchasing works of art, but in a time of economic crisis, few collectors were eager to part with their prized possessions. To meet the exceptional demand, a new investment grade of art called Red-chip was created.

Red-chip artists are frequently younger, up-and-coming artists who simultaneously produce new works on the primary market and command exorbitant prices for their creations on the secondary market. These up-and-coming new artists bypass the conventional path of advancing their careers by relying on galleries or dealers and instead use social media to market their own work, finding incredible monetary success in a very short period.

Additionally, the growth of social media can help forge real relationships between artists, purchasers, and crucial market participants, forming significant networks and giving artists the chance to receive immediate public feedback in the form of ‘likes’ and ‘comments.’ Instagram additionally enables new collectors from developing nations to enter the art market, thereby fostering a diversity of tastes and aesthetic fads.

On the other hand, the market may experience significant issues because of this social media-driven spike of cultural amnesia. Classic Blue-chip art loses value if buyers continue to be primarily interested in the most recent works, or Red-chip art, and the entire notion of using art as an alternative investment is put into question.

Despite this, Blue-chip art has and most likely always will hold its value, much like aged whiskey rather than a wine that at some point in its life will go sour. There’s a reason as to why Picasso has remained one of the most sought-after artists. It’s the safer option, as no artworks from these artists are likely to lose any of the value they currently hold.

Due to how new the concept of Red-chip art is, especially with changes to the market thanks to social media culture, it’s difficult at this point to say for certain which is the better investment, especially from an outside perspective. Only time will tell if Blue-chip will remain at the head of the market.

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