Sotheby’s Auction House recently sold a 101-carat diamond at auction to an anonymous buyer for $12.3 million. The buyer paid for the purchase in an undisclosed cryptocurrency, assumed to be either Ethereum or Bitcoin, which Sotheby’s Hong Kong announced it would accept.
This sale marks the highest estimate ever for a physical object auctioned for cryptocurrency. The diamond, named “The Key 10138”, far exceeded the typical carat market value of around $10,000 due to its size, clarity, and flawless cut.
Sotheby’s expected to sell the diamond for anywhere between $12 and $15 million. It was the first time such a large diamond was offered with the option of paying with cryptocurrency.
The auction represents an important achievement in the acceptance of cryptocurrency at auction and may well lead to greater crypto adoption in other areas of trade.
However, this isn’t the first time Sotheby’s accepted cryptocurrency at auction. In May, a work by Banksy sold for $12.9 million at auction in collaboration with Coinbase, which facilitated the payment.
Cryptocurrencies have had a turbulent year and regulators from around the world are warning about their potential misuse. Nevertheless, events such as this auction bode well for the use and adoption of crypto for everything from gym memberships to crypto credit cards.
Part of the demand for crypto is likely precisely because it is so volatile and therefore attractive to risk-tolerant investors. But it also reflects the security and privacy that reassures many people in an increasingly insecure market environment.