Green-chip art refers to artworks that exist in the secondary market, ready to be rediscovered and recirculated.

Unlike the widely used “blue-chip art”, and the more recently coined category "red-chip art”, green-chip art represents the silent majority of art currently hidden in private collections. Green-chip art is appreciated for its intrinsic qualities, history, and provenance; and hold significant value and potential, offering collectors the chance to uncover investment-grade gems, thereby appealing to many, from seasoned collectors and first-time art buyers.

The term "green-chip" underscores a commitment to sustainable practices, emphasising the recirculation of art. It also reflects the broader concept of promoting green investments as opportunities for future growth.

Welcome to 2024. As we navigate the mid-2020s, you might find yourself looking to spruce up your home. Whether you've had the same artworks adorning your walls for years or you're new to the art world and eager to fill that empty alcove with something special, finding the right platform to buy or sell art can be challenging.

In general, the process of discovering and purchasing the perfect artwork can be lengthy and daunting. The art market today is hampered by high fees, intimidating and inaccessible sale and auction models, and inefficient (perhaps non-existent) secondary market infrastructure, making both buying and selling art an often prohibitive experience. In addition, generic marketplaces are simply too vast and unfocused, lacking the dedicated attention and quality assurance needed for art transactions.

While large auction houses like Sotheby’s and Christie’s have successfully facilitated art transactions over the last three centuries, thereby driving significant global interest in art collecting, they remain painfully out of reach for the vast majority of art owners in part due to their high commissions and premiums (see our previous article on the buyer’s premium here).

Green-Chip Art

Here at Art Again, we sincerely believe that for the vast majority of art out there, the selection criteria imposed by the current art market, auction houses and the legion of fees incurred throughout the art buying and selling process is simply not worth it.

This is the silent majority of art that we have coined as green-chip art. Green-chip art is art that exists in the secondary market that is ready to be rediscovered and recirculated, whether amongst existing art collectors or to be placed in the hands of a first-time buyer. Green-chip art is valued for its intrinsic qualities, history and provenance, and offers the potential of discovering investment-grade gems. 

If you’ve ever tried reselling an artwork, you know how challenging it can be. The difficulty often has more to do with high market thresholds and poor infrastructure than with your artwork’s value or quality. This issue is staggering, over 98% of art does not sell more than once [1].

This is why it is important to introduce the term green-chip art. It represents a small toward addressing this historically overlooked segment of the art trade.

Blue-Chip Art

Green-chip art is a play on the more popular term blue-chip art, used in the art world to describe art produced by well-established artists that have a “proven value” on the secondary market - this also explains why blue-chip art can be sold at astronomically high prices. In comparison, green-chip art is produced by a wider range of artists, without imposing limits on the reputation of the artist. This range includes reputable artists, lesser-known and even unknown artists who may have been written out of history but have still produced beautiful, meaningful art. 

For blue-chip art, auction houses remain the go-to for the foreseeable future. Patrons of auction houses may be more inclined to see art as an asset for investment purposes and are drawn to the reputable branding of the auction houses.

The term “blue chip” is used to describe the value of stocks in stock markets like SGX, Nikkei, Nasdaq, and S&P 500. It was invented in 1923 by Oliver Gingold, an employee who worked at the Dow Jones & Co. to describe stocks that were of high value and had potential for long-term growth, with the ability to turn a profit consistently both in periods of economic downturns and expansions. Stocks were likened to poker chips, where blue chips had the highest value out of any chip in the game.

Blue-chip art is produced by established artists that have a history of success and thus a “proven value” on the secondary market. They are perceived to have safe and predictable returns on investments.

Picasso is another perennially popular artist whose works always sell for a high price. In Asia, some contemporary Chinese artists like Ai Weiwei and Zhang Xiaogang are considered blue-chip artists due to the history of their art works being consistently sold for record prices.

Red-Chip Art

A related term, red-chip art, was more recently coined by art journalist Scott Reyburn in early 2021 to describe art by emerging artists that have returns on investments that are less predictable because they have not had a “proven value” on the secondary market [2]. Red-chip art is usually promoted through the Internet or through social media. In recent years, such art has commanded an equal or even higher price than blue-chip art. Many red-chip artists are younger than blue-chip artists, many of whom are born after 1980 and still produce art to be sold on the primary market.

For instance, Dana Schutz’s 2017 oil painting, Elevator, picturing the densely crowded inhabitants of an elevator menacingly trapped between its metal doors, fetched $6.5 million at a Christie’s auction in 2020, which was more than double the high estimate for the work.

At the very same auction, a hand-painted Campbell’s Soup Can 1962 by blue-chip artist Andy Warhol sold for $6.1 million. The outperformance of a so-called “red-chip” artist at auction showed a paradigm shift in the way that art patrons thought about buying art. Art collectors are no longer just seeking to buy art by blue-chip artists for their almost-guaranteed profitable resale, but are also investing in less established, red-chip artists, perhaps for the thrill of a promising flip. It also shows the vast potential artworks have in the secondary market.

According to Morgan Stanley, the estimated global value of art and collectibles as an asset class is US$3 trillion.

The current annual turnover for art is approximately US$65 billion (UBS x Art Basel Report 2024). With over 90% of this figure contributed by established industry and institutional players, a hidden majority of art never gets resold or re-homed, with a significant few seeing a shift of hands privately perhaps once or twice in their lifetime. There is an undercurrent of demand for secondhand art, but no comprehensive way to facilitate these transactions on a global scale.

Without boring you with the math, we estimate the seizable green-chip art segment sits in the billions.

This is where we come in.

Art Again is in the business of facilitating the trade of green-chip art. Blue-chip and red-chip art remains vastly inaccessible to many. It is currently available at unattainable price points, or more recently through smart fractionalised investment startups like Masterworks - in the latter, art becomes more asset than, well, art. 

On our end, green-chip art is a circular art offering that taps into a market of potential investment-grade art gems. By bringing green-chip art to the masses, we are plugging a gap. Recent trends in the art world show positive signs of a changing market: the soaring popularity of red-chip art made possible through the Internet, and as discussed in our previous article, the reduction of the buyer’s premium by Sotheby’s earlier this year which lowered barriers for art buyers. 

Since launching its first ever listing mid-May 2023, Art Again has successfully onboarded and catalogued over 300 artworks, with a cumulative value of more than SGD $1.2 million. Unlike our competitors, our fee structure is simple. A 15% seller commission fee upon sale, and that’s it. We do not charge a buyer’s premium. By offering affordable art, we’re able to keep the marketplace accessible to all.

By encouraging a circular ecosystem of art trade where secondhand art is bought and sold easily, we hope to give meaning to art again - art otherwise hidden and undiscovered in the homes of private collectors.

The best part? Art Again is for everyone, from seasoned art collectors to the first-time art buyer who may be a little apprehensive about whether they too can collect art. 

[1] In analysing sales and resales across a 50-year period between 1960 and 2010, a period that has anecdotally been construed as one of the longest bull markets in art history, 98% of art did not sell more than once. Artsy caveats that there were undocumented private sales and transactions in that period: https://www.artsy.net/article/artsy-editorial-often-ignored-problem-buying-art-investment

[2] Read more from art journalist Scott Reyburn, who coined the term “red-chip art”, here: https://www.theartnewspaper.com/2021/01/08/blue-chip-artists-move-over-here-come-the-red-chips

Written by Ethan Leung & Milon
Art Again © 2024