The People Who Built the Market Explain Why It Broke

Le Random’s September 14 podcast episode put two men in a room who had never met: Kayvon Tehranian, cofounder and CEO of Foundation and Rodeo, and Sebastian Sanchez, who ran digital art sales at Christie’s for three years before the department was folded into contemporary art. Host Peter Bauman’s framing question was why the auction houses pulled away at exactly the moment museums seemed to lean in. The answers turned into the clearest post-mortem of the 2021 market I’ve seen from the people who ran its infrastructure.

The collapse timeline, from the inside

Sotheby’s dissolved its digital art team in September 2024. Christie’s followed about a year later. Platforms closed in sequence: Nifty Gateway, KnownOrigin, MakersPlace, and Rodeo, whose users relaunched it themselves in September. Foundation’s ownership moved to Blackdove in January after a turbulent courtship. Tehranian’s summary of the whole sector: “People were needing business models that work, and none of these business models are working… irrespective of strategy.”

What the money actually was

Tehranian’s diagnosis is blunt: the 2021 boom was never collecting. “Most of that money and capital was speculative in nature, and it was mostly stemming from the actual crypto industry itself… I don’t think it was collectors.” When crypto-native wealth repriced, demand collapsed, supply glutted for years, and the industry capitulated. His present tense is equally direct: “The market that appeared in 2021 is largely gone.” And of his own shop floor: “We built really good products in a bunch of different ways. And there is no business model that’s really working right now.”

Sanchez, who has been in crypto art since 2018, marks the same arc through a single artist: “I was selling Tyler Hobbs prints for $700 just like seven years ago. And now this guy is selling for hundreds of thousands of dollars, about millions, major auction houses.” His structural observation is that this market is the first in history where art and finance are flattened onto one layer — “the trading and the market is sort of literally coded into the artwork.” His warning follows: “The market and speculation is our biggest enemy. From within, we’re sort of biting ourselves in the foot.”

Why Christie’s quit, by someone who was there

Sanchez’s insider account is the most concrete part of the episode. His biggest competition at Christie’s was the permissionless open marketplace itself — collectors knew each other, transacted directly, and paid no buyer’s premium. “There is no case [for] what does Christie’s really add from a secondary market perspective?” The department tried marketing, exhibitions, institutionalization, press. Revenue stayed flat annually while expenses ran high — complex installations, artist deals. The growth sector that actually materialized inside Christie’s was luxury goods: watches and handbags. When the cuts came, “they did fire the people that kept me as a specialist.” He adds the detail auction houses rarely say aloud: “Artists hate auction houses,” and the department he worked in was unusual for working with artists on primary premieres at all. “The real magic is happening in the primary market” — the secondary market, he says, is about five artists (XCOPY is his example).

The institutions fight

This is where the episode argues with a beat like mine. Tehranian, unprompted: “This desire for institutions is kind of consistently overstated. It’s been this talking point for years. I’ve never seen it actually drive outcomes. It’s a lagging indicator. It’s a post facto thing. So… there’s an obsession with them, and I think it’s misplaced.” He points out that Foundation’s multimillion-dollar auctions ran on technology alone — early participants were anti-institution, and institutions played zero role in the platform’s rise. “I’ve just never really seen an institution drive the industry to a new height… It’s never been something that’s reversed trend lines that already existed.”

Sanchez disagrees with the timing, more than the direction. Museum acquisitions move prices in traditional art at a lag — shows travel for three-plus years before market impact. His planning horizon makes the mismatch concrete: he places works for museum exhibitions in 2028. Tehranian has a mirror-image anecdote: “I’m friendly with the curator at MoMA who’s a digital art curator, and she’s like, they’re putting on shows in like nine months for their big LED wall, and it’s like that’s the fastest they’ve ever worked in their entire life. And they don’t even know how to process the artist, understand their technology, actually translate that into a public facing thing.”

Sanchez’s synthesis: the departments get cut because they can only justify investment once the sales exist — “they’re lagging” — while the market itself sits “in no man’s land”: the anti-establishment builders’ experiments mostly didn’t sustain, and the old guard isn’t thriving either, so entering a technical, unstable context appeals to no one with capital.

Why this matters here

I cast institutional acquisitions on a recurring basis — Pompidou’s digital committee and Whitney’s artport relaunch got coverage here this month — on the working theory that institutional commitment signals staying power. Tehranian’s claim is aimed directly at that theory: validation follows markets, it never leads them. The honest counterevidence is that both speeds coexist right now. Museums are leaning in on subsidized, multi-year timelines while the P&L-driven arms — auction departments — cut and run. Sanchez’s “no man’s land” is exactly the gap between those two speeds.

What I can’t resolve: if the people who built the primary platforms say institutional validation was never a leading indicator, what is? Sanchez’s answer is patience and stewardship (“invest and support artists, institutions, platforms… with a long-term vision, who will last”). Tehranian’s is that the question is malformed — the industry “was its own thing with its own sort of driving forces.” Both ran something real, and both are still standing. That’s the part worth weighing.

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