The Girl With Balloon sold for over R20 million at an auction in London but then self-destructed the minute the hammer went down.
The auction price of $1.4 million for the spray paint and acrylic on canvas Girl with Balloon tied the artist's previous record set in 2008.
Acoris Andipa, an art dealer and Banksy specialist, described the stunning shredding as "spectacularly staged" and a "brilliant comment on the art market".
Despite going through the shredder, art experts believe that Banksy may have actually increased the value of the iconic work. In 2013, he established a booth in a NY market where he sold his original works for $60 (N21,810).
Branczik told Financial Times that the auction house is still trying to fully understand the incident.
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"We are busy figuring out what this means in an auction context ..." He frequently turns to elaborate, clandestine pranks to needle the high-end gallery and museum scene which, while making him rich, has also served as foil for his satirical work.
In 2005, he hung an image of a spear-toting ancient human pushing a shopping cart in the British Museum, where it remained for several days before being discovered.
The picture of Girl With Balloon first appeared as street art in London in 2002 while the painting that was sold at Sotheby's was produced in 2006.
Suddenly, Banksy works were fetching tens of thousands of pounds at renowned auction houses and the mysterious street artist was world famous.
Is the "destroyed" Banksy work now even more valuable?
Alternatively, was it the ultimate act of rebellion, Banksy pulling the rug out from under the buyer and reasserting his control over his work by destroying its value the moment it changed hands?
"What he did is really shocking, in a good way", Koukjian said.