Once an artist is appointed “Blue-Chip”, it can be rather hard to nudge them off the list. However, with the changing tastes of collectors, among other factors, an artist’s ongoing status can never be guaranteed.
3 reasons an artist may fall off the Blue-Chip list
#1. Abhorrent past or present actions or beliefs of the artist are revealed.
A surprisingly small number of artists have been scrubbed from investor portfolios for past abhorrent actions. But, I wouldn’t be surprised if more and more artists are actively avoided by collectors in the future.
With younger, and seemingly more ethical investors diving into the art market, a few artists may become sidelined and eventually fall of the coveted Blue-Chip list. Pablo Picasso is one artist that springs to mind in this regard. Combine his high-profile with his known treatment of women, and the likelihood he is shunned by younger investors is pretty significant. In such a scenario, while it is likely he will always be ‘collectable’, the rate at which his prices rise may fall, stagnate, or reverse.
#2. Scarcity of work for sale
To be considered Blue-Chip, an artist has to be bought and sold frequently by major institutions or auction houses. Frequency and volume are essential components for Blue-Chip artists. Thus, if the trading volume of a Blue-Chip artist dries up as collectors or museums horde their work, their Blue-Chip status can be compromised. This is one reason why old masters, such as Leonardo da Vinci, are not considered a Blue-Chip artist; there is simply not enough of their work exchanging hands.
#3. Change in collector tastes
Participation in the stock market has exploded in the past 5-years, primarily driven by young, and now more niche investment opportunities are being explored by these young investors, including cryptocurrency, options trading, and art investing.
With a flood of new young investors entering the art market, the demand for certain artists with youthful affiliations are likely to rise (think Kaws and Banksy), while others, with seemingly dry looking artwork, may fall (think Carl Andre and Donald Judd).