Saturday, June 12

NFTs Arrive in the Watch World

The latest crypto-token craze is spilling over into watches.

Following a torrent of record prices for digital assets from artwork to sneakers, the first watch NFT — or “nonfungible token,” verified by blockchain technology — was offered early this month. It didn’t sell, and the auction has been extended.

But other NFT prices, realized on online platforms and by traditional auction houses, seem to signal that NFTs are attracting investors as well as creating new ways to own or just enjoy watches as dematerialized assets. And more watch NTF auctions are scheduled.

The first watch NFT to go on sale was the Bigger Bang All Black Tourbillon Chronograph Special Piece, offered by Jean-Claude Biver, the industry veteran who emerged from retirement to seize an opportunity to make history.

“What we are doing today is a world first that will have wings,” Mr. Biver said in a Zoom presentation on March 30, at the beginning of the original six-day auction. “We are at the start of something great.”

On March 25, the watch brand Jacob & Company announced that it would offer the first watch NFT on the new platform ArtGrails. (The piece, a digital-only SF24 Tourbillon Piece Unique, went on sale April 4, but it was interrupted and started again as a new auction that ended on Thursday.)

But on March 30, Mr. Biver began his auction on the OpenSea platform, with the aid of Carlos Moreira, founder and chief executive of WISeKey International Holding, a cybersecurity company based in Geneva. A giant image of Mr. Biver and Mr. Moreira flashed on the Nasdaq MarketSite in Times Square to let everyone know the auction had started.

But five days later, only three bids could be seen — 1 ether that was the equivalent of about $2,078 as of April 5; 1.05 ether, or about $2,182; and 25 ether, or about $51,961 — none of which met the undisclosed reserve price. Now, the auction has been extended to April 30.

The Jacob & Company NFT was a 3-D animation produced by the brand and inspired by its Epic SF24 travel watch, but with two added features to make it a bespoke digital creation: a tourbillon and a split-flap system displaying the names of 10 cryptocurrencies.

“Our watch NFT is a purely digital, tokenized asset that only exists in the digital space,” Benjamin Arabov, chief executive of Jacob & Company, said during a video interview on March 30 from New York.

On April 5, a day into the auction, “it got so many bidders that the platform couldn’t handle it and crashed,” Mr. Arabov said. “It went up to $3.1 million and then the whole thing came crashing down.”

The sale was restarted April 7, this time for a 24-hour period to reduce the risk of “hackers,” Mr. Arabov said. The final price was 50.74 ether, or about $100,000.

“A lot of my collector clients are intrigued by NFTs, because they are new and different,” Avery Andon, an art dealer and founder of the NFT platform ArtGrails, said in a video interview from Miami. “But NFTs will take some getting used to.”

Will watch collectors be inclined to buy digital watches pegged to a blockchain token, without ever possessing an actual watch?

“NFTs derive their value from their scarcity,” Mr. Andon said. “This Jacob & Company NFT is the only one in the world, and serious watch and NFT collectors see inherent value in that.”

And, Mr. Arabov said, “Most watch collectors keep their watches in the safe 99 percent of the time, anyway.”

Beside assurances of provenance and scarcity, the Jacob & Company NFT was sold with a bit of watch purchasing tradition: a paper certificate and a storage box fitted with a hard drive to store the NFT.

On April 23, Sotheby’s is scheduled to become the first major auction house to sell a watch NFT when a Ressence Spymaster comes up for sale in Hong Kong along with its NFT, a computer-generated video of the watch.

“The NFT digital video which accompanies the watch seems just the right way to emphasize its true value,” Sam Hines, Sotheby’s head of watches, said in a news release.

And on the same day, Phillips is scheduled to sell a digital artwork titled “Replicator,” by the artist Mad Dog Jones, whose real name is Michah Dowbak. The piece, listed in an online auction, is described as having the ability to reproduce itself every 28 days, resulting in seven generations of artworks.

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