Opportunity Pops: US Collectors Capitalise On Weak GBP
Di-Faced Tenners © Banksy, 2004
Market Reports
A severely weakened British pound, economic turmoil & social unrest has spooked the markets. But for US based investors & collectors, a unique generational opportunity presents itself. Blue-chip works held in the UK and priced in GBP are in some cases more than 30% less expensive than 12 months previously.
Read our latest 2023 Print Market Report here, for data and expert insight into the prints and multiples market over the last five years.
Or, explore investment opportunities in The American Pop Print Market for 2023 here.
Since the start of 2022 the British pound has fallen more than 20% against the US dollar.
www.xe.com - £ GBP vs. $ USD 2 Year TrendIn June 2021, £1.00 would have bought $1.42 at mid-market rates. At the time of writing that represents an unprecedented 24% drop in the strength of the pound.
To exemplify, in June 2021 a signed work by Banksy - Girl With Balloon - could be expected to sell for £500,000 - or approximately $700,000. Given the softening of the market & forex fluctuation - that same work now retailing today at £400,000 is priced in USD at $432,000. That’s a drop of 38%.
Near parity between USD & GBP has created a dramatic UK economic meltdown, the fallout already leading to significant market and social impact. In the face of this, traditional & alternative assets have taken a tumble:
- Traditional investments such as Bonds & Equities are falling, at the time of writing the S&P was down 12% over 30 days & NASDAQ -15%.
- Crypto’s downward trajectory has been exacerbated, though Bitcoin is less extreme than equity markets at -7%.
- The housing market has stagnated due to rising interest rates & forecasts expect further rises. Sellers don’t want to sell & buyer’s balk at the rising mortgage costs.
- NFTs are significantly down with major projects showing double-digit declines of upto 40% over 30 days
Danny Baldus-Strauss 2022
The question is - how long will it last? In a crisis comes opportunity for those willing to act quickly & capitalise. MyArtBroker has already seen a significant rise in enquiries from non-UK based clients. Blue-chip prints and editions have historically proved their resilience during economic downturns & outperformed other investment assets.
Alternative Assets vs. Banksy vs. Contemporary Blue Chip ArtistsThe graph above illustrates the indexed performance of Banksy prints against a selection of other alternative assets: a REIT (Simon Property Group), a gold ETF (GLD), an oil ETF (USO), a hedge fund tracker (ADAIX), and a private equity tracker (PSP). It also includes a basket of other blue-chip artists including Damien Hirst, Bridget Riley, David Hockney, Harland Miller, Stik, Invader, KAWS, and Julian Opie.
For US collectors & investors - the rise in the value of artworks has largely been offset by the collapse of the pound.
Mick Jagger (F. & S. II.138), a 1975 work by Andy Warhol, has increased in value by 38% in GBP over the last 12 months. Sold in October 2021 for £101,412 ($138, 600) that same work now retailing at £140,000 equates to only $151,248 USD - an increase of only 9%.
For medium to long-term investors and collectors transacting in USD, the opportunity to acquire important works by globally recognised artists has never been better. Though weak, the pound has already gained against the dollar since its historic low of $1.04 on September 26th 2022. The Bank of England is almost certain to hike interest rates to curb inflation so the window of opportunity could be short.
Browse available works from our network here, or contact us to speak to our specialists to discuss immediately available investment opportunities.
To learn more about the performance of the print market over the last five years, download our complete 2023 Print Market Report here.
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