Cash, Credit or Bitcoin?
will eliminate the currency risks, says Christophe Barre, the company’s chief financial officer.
The enthusiasm from bitcoin holders was quickly obvious to the company; the Big Bang edition watch was almost immediately oversubscribed. Delivery on the watches begins next month.
The price of bitcoin soared from US$970 in 2017 to roughly US$20,000 before dropping to US$6,321 in October 2018. While nobody knows how many millionaires and billionaires this has minted, it’s clear that the extraordinary wealth created by cryptocurrencies is injecting energy into secondary luxury markets as the holders of bitcoin, Ethereum and other currencies seek to spend their new-found riches.
After watching the value of her experimental bitcoin purchases soar, Elizabeth White used her earnings to found the White Company, which serves as a broker for crypto holders to buy yachts, helicopters, automobiles, artworks and other goods on the secondary market. She says she has 30,000 clients overall and notes: “I have 58 clients who have spent US$1 million on a transaction.” She hedges for currency fluctuations with a hedge-fund partner and pays sellers in ‘fiat’ – crypto lingo for dollars, euros and other traditional currencies. She says her self-funded business has an advantage over luxury companies that must meet investors’ earnings expectations. “Established companies would never take that kind of risk. It’s very scary.”
It remains to be seen if other luxury brands will take the plunge, but a number of projects suggest that it’s more an issue of when (and how) than if.
Accepting crypto does offer access to a wealthy young group of consumers who may be new to luxury markets and could be good customers for many years to come. White says many of her clients prefer various forms of texting to telephone calls or emails. “The younger generation doesn’t want to talk to you. If they could send emojis they’d probably be happy.”
Some of your favourite luxury items
may soon only be available with cryptocurrency. How did this happen?