The world’s luxury brands are waking up to crypto, but they’re not thinking big enough. Crypto is cool, crypto is tres chic.
Recently, Acker, America’s oldest wine store, began accepting several cryptocurrencies as a form of payment.
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“We’ve had numerous requests regarding cryptocurrency over the past few months, which set us in motion,” an external representative for the fine wines retailer and auction house said. While it hasn’t yet made a sale in crypto, it “anticipates doing more and more business in cryptocurrency as time goes on.”
It integrated with BitPay with the understanding that crypto could become an “everyday” payment mechanism and that crypto people have lots of new money.
“It is clear that there has been significant wealth created by cryptocurrency and that there is a new demographic of buyer with significant buying power [who] is here to stay,” the rep said.
It’s following a familiar playbook here. During crypto’s first major hype cycle, a single Lamborghini dealership accepting BTC made headlines. In 2017, a gold retailer, a few politicians, a Swiss university, a budget airline and Microsoft began accepting at least BTC. Others experimented with the crypto obsession du jour, initial coin offerings, too.
The pace accelerated quite a bit this year. Tesla began accepting BTC, as have the National Basketball Association’s Dallas Mavericks and Major League Baseball’s Oakland Athletics. There’s a boutique hotel in Nashville and two luxury watchmakers, Franck Muller and Hublot, are selling certain timepieces exclusively for BTC. I’ll spare you the rest.
All these businesses are thinking in the fiat mindset, where you simply trade one asset (usually worthless dollars) for another consumable good. But crypto can open up a world of opportunities.
As Vogue Business noted: “Cryptocurrencies can act as social tokens, building community and loyalty.”
These are things that traditional asset classes just cannot provide. Trading crypto for a case of wine could be a decent deal if you time the purchase correctly; wine is a highly appreciable asset, and a case of 2010 Brunellos might outcompete the DOGE you spent on it. But it also may not.
That’s one of the reasons no one apparently jumped at the opportunity to buy a Tesla in BTC – despite the fact that it’s perhaps supplanted lambos as the automotive status symbol for coiners. Acker is betting “crypto investors look to diversify [into] wine.” I think they’re more likely to do it in fiat.
Crypto’s nouveau riche don’t just want conspicuous consumption, they want more crypto. The New York Times and Forbes orchestrated successful non-fungible token (NFT) auctions because it left crypto holders with another volatile asset that follows the same moon logic that made them rich in the first place.
In a recent New York Magazine article, tech critic Scott Galloway predicted luxury brands will develop a “coin strategy,” which would merge the world of crypto and brand “loyalty.” Companies have long issued points/rewards/tokens, and crypto offers programmability and much greater opportunity for business innovation.
Institutions like Stanford or Chanel could auction social tokens that are provably scarce, confer special privileges and let them be owned outright. Stanford coin would secure your child’s seat at the university, while a $10,000 Hermes coin might buy you a dedicated personal shopper. Perhaps Tiffany would only sell its latest releases to TFNY coin holders, Galloway imagined.
“Crypto is leveraging our instincts around scarcity,” he said. There’s some force deep in the human psyche that values rare things. It’s the driving force behind crypto and luxury goods.
If luxury brands want to stay à la mode, they had better make a move.