Sotheby's said on Tuesday it would accept bitcoin and ethereum as payment for Banksy's iconic artwork "Love is in the Air", a first for a physical art auction and the latest sign of growing mainstream acceptance of cryptocurrencies.

Bidding for the work is estimated at $3 million to $5 million, Sotheby's said, with the buyer having the option to pay with cryptocurrency.

The auction house has tied up with cryptocurrency exchange Coinbase Global Inc for the sale. Coinbase said in a blog it would help manage price fluctuations during the auction in New York next week.

Bitcoin hit a record high just shy of $65,000 last month, the latest landmark on the emerging asset's march to wider acceptance. Its gains have been fueled by growing acceptance among major US companies and financial firms.

Cryptocurrencies have already made a mark in the world of digital art.

A digital artwork - "Everydays - The First 5000 Days" by American artist Mike Winkelmann who is better known as Beeple - sold for nearly $70 million at Christie's in March, in the first ever sale by a major auction house of a piece of art that does not exist in physical form.

Coinbase said its partnership with Sotheby's could pave the way for further adoption of cryptocurrency across the bidding house's auctions.