First Mover Asia: Thailand Has Already Proven Why Taking Crypto for Luxury Items Isn't Working

Gucci will begin accepting crypto payments at five stores as part of a wider commitment, but the success of its initiatives is uncertain; bitcoin plummets in Thursday trading.

AccessTimeIconMay 5, 2022 at 11:58 p.m. UTC
Updated May 11, 2023 at 6:57 p.m. UTC

Good morning. Here’s what’s happening:

Prices: Bitcoin and other cryptos plummet.

Insights: Will Gucci's entry into the crypto world have staying power?

Technician's take: BTC is in danger of breaking below a short-term uptrend.

Catch the latest episodes of CoinDesk TV for insightful interviews with crypto industry leaders and analysis. And sign up for First Mover, our daily newsletter putting the latest moves in crypto markets in context.


Bitcoin (BTC): $36,515 -7.9%

Ether (ETH): $2,747 -6.5%

Biggest Gainers

There are no gainers in CoinDesk 20 today.

Biggest Losers

Asset Ticker Returns DACS Sector
Cardano ADA −11.5% Smart Contract Platform
Polkadot DOT −10.9% Smart Contract Platform
Algorand ALGO −10.8% Smart Contract Platform

A rough day for cryptos

Bitcoin plunged. Equities swooned.

Wednesday's assets rally seemed like a distant memory as investors faced the cold reality of higher interest rates and a global economy that is shaking to its core.

The largest cryptocurrency by market capitalization fell by as much as 10%, dropping below $36,000, its lowest level since January. Bitcoin was more recently trading just above $36,500, off about 8% over the past 24 hours. Ether, the second largest crypto, was trading at about $2,750, its lowest mark since March and down 6.5% from the previous day.

Other major altcoins fell significantly into the red a day after a relief rally that followed the Federal Reserve's long-awaited announcement of a half-point interest rate hike with ADA, AVAX and AXS down 10%, 11% and 12% respectively at one point.

On Wednesday, investors had piled into cryptos and other higher risk assets after U.S. Federal Reserve Chairman Jerome Powell highlighted the strength of the U.S. economy and said that the Fed wouldn't consider a three-quarter point increase at its next meeting. Powell's comments soothed investors, who have been fearful that the Fed's recent aggressiveness will send the U.S. economy into recession. Those fears returned with a vengeance on Thursday as companies weighed the impact of rising prices on the consumer spending that has fueled economic growth.

Equity markets were hard-hit with the tech-focused Nasdaq plummeting over 1,000 points, its poorest performance since 2020. The S&P 500 and Dow Jones Industrial Average each tumbled over 3%. Even gold, a usual comfort zone for risk-shy investors, dropped almost a percentage point.

"There was a complete loss of confidence on Wall Street," Oanda Americas senior market analyst Edward Moya told CoinDesk. "Yesterday's risk-on rally, which sent equities, cryptos and all risky assets higher as investors are starting to have doubts with the global economic recovery. There's a major, de-risking moment happening that's sending cryptos down sharply."

Moya said that Powell may have overplayed his hand in telegraphing the Fed's unwillingness to boost rates in larger increments. "He showed the markets that he might not be ready to fully fight inflation," Moya said, adding that bitcoin support at $33,000 will be key and that volatility similar to the past two days is likely to repeat.

"We should not be surprised if we continue to see those types of swings over the next several days," Moya said.


S&P 500: 4,146 -3.5%

DJIA: 32,997 -3.1%

Nasdaq: 12,317 -4.9%

Gold: $1,877 -0.8%


Will Gucci's latest crypto initiative work?

Gucci has announced that it plans to accept crypto at some stores around the U.S. The question is, how long will this endeavor last?

For Tesla (TSLA), it lasted just over three months before it decided to shutter the payment offering, citing environmental concerns. But the reality is, few people – if anyone – actually bought a Tesla with bitcoin because of the tax liability when liquidating the bitcoin and the administrative burden of new anti-money laundering filings required for any purchase of goods worth over $10,000.

It’s not surprising then that most of the retail payment volume for merchants comes from cheaper goods. BitPay, which operates one of the larger crypto merchant services, reports that the majority of its volume comes from transactions involving prepaid or gift cards, internet services, virtual private networks or games. The company says it sees about 70,000 transactions per month and has processed $5 billion in transactions since its launch a decade ago. That might seem like a lot, but is scant considering crypto exchange Binance processes $18 billion in trades per day.

For a while, one of the few successful high-value industries that accepted crypto as a payment method was real estate in Thailand. Most new developments target foreign nationals, and developers saw this as a way to attract the crypto nouveau riche who wanted their own slice of the "land of smiles."

But Thai authorities weren’t comfortable with the arrangement. While Thailand has a reputation as a place to hide money from the law, local authorities have been working hard to update anti-money laundering laws and get the country off the U.S. State Department’s list of “countries of primary concern” for money laundering.

Real estate has historically come up as a money-laundering vector with some high-profile names being targeted by Thai police. When the Thai Securities and Exchange Commission banned crypto as a payment method in March, this was undoubtedly on its mind.

Luxury goods like Gucci products are an even easier way to launder money than real estate. The Gucci brand is widely loved, and its goods are in demand worldwide creating a liquid market. Criminals have long used luxury items as a way to integrate dirty money back into the banking system because these goods can be bought and resold with relative ease while preserving their value.

So for Gucci, those who want to purchase goods worth over $10,000 will need to file paperwork reporting their purchase. Gucci’s compliance and risk analysis teams may have an even lower threshold for crypto transactions because of money-laundering concerns. This undoubtedly would create a friction point for consumers, and the more of these there are, the less attractive a payment method becomes.

Let’s see how long Gucci’s crypto payment option lasts. Unlike Tesla, the company doesn’t have a strong ESG (environmental, governance and social) mandate, and maintaining the crypto merchant services doesn’t require much overhead. But how many people will actually make a transaction?

Technician's take

Bitcoin Dips Below $38K, Support at $30K-$32K

Bitcoin's daily price chart shows support/resistance with the 20-day moving average of trading volume below. (Damanick Dantes/CoinDesk, TradingView)
Bitcoin's daily price chart shows support/resistance with the 20-day moving average of trading volume below. (Damanick Dantes/CoinDesk, TradingView)

Bitcoin may break below a series of higher price lows that has formed a trend since Jan. 24, which could yield further downside toward the $30,000-$32,000 support zone.

Still, a daily close above $37,500 could signal short-term stabilization. For now, upside appears to be limited despite intraday price swings, evidenced by slowing momentum on the daily, weekly and monthly charts.

The slope of the 100-day moving average has flattened over the past few months, which indicates weakness in the relief phase since the Jan. 24 price low near $32,900. Immediate resistance is seen at $40,000, which could limit buying activity over the short term.

Additionally, selling volume isn't as extreme compared with previous down moves in price. That suggests further downside is likely before sellers capitulate.

The 20-day moving average of BTC's trading volume based on Coinbase exchange data provided by TradingView declined from February to April, reflecting weak buying pressure within the $35,000-$46,000 price range.

The uptick in volume since late April, although negligible, should be monitored for signs of heightened selling pressure, which could signal a brief price low of around $30,000.

Important events

9:30 a.m. HKT/SGT(1:30 a.m. UTC): Reserve Bank of Australia monetary policy statement

9:15 p.m. HKT/SGT(1:15 p.m. UTC): Speech by John Williams, president of the Federal Reserve Bank of New York

CoinDesk TV

In case you missed it, here is the most recent episode of "First Mover" on CoinDesk TV:

NFT artist Nicole Buffett joined "First Mover" to discuss her projects. How would she explain them to her grandfather, crypto cynic Warren Buffett? Plus, Ben Emons of Medley Global Advisors provided crypto market analysis, and Michael Morisy of MuckRock discussed the future of document file storage. Preservation of media content has begun, but how does it work?


India's Parliamentary Finance Body 'Chides' Crypto Industry in Meeting: Sources: The meeting was held in the Indian IT hub of Bengaluru and was the second time the finance committee has met representatives of the crypto industry.

Binance, Sequoia Among Investors Backing Musk's Takeover of Twitter: The crypto exchange commits $500 million to help fund the deal.

Solana Pay Adds Customized Transaction Requests for Merchants: Pay previously allowed only one-way transfers of Solana-supported assets between users.

Lindsey McInerney: The Metaverse and the 'DIC Punch': On building the Stoner Cats and Gimmicks NFT franchises. McInerney is a speaker at CoinDesk's Consensus festival in June.

Longer reads

Matt Taibbi, PayPal's Deplatforming and the Case for Crypto: The famed magazine writer wrote a story about alt media financial censorship. Oh, how deep the story goes.

Said and heard

"Crypto is not a necessary tool for many people who use it but is often a way to signify a lifestyle or alignment with a certain movement or set of ideas. Crypto’s users are often conspicuous consumers – sometimes by nature of blockchains being public records – and often concerned more with using the right application or the right coin." (CoinDesk columnist Daniel Kuhn) ... "When it comes to NFTs, “what excites my grandfather the most is that it’s really giving artists a chance to share their work, make a living on their work and express themselves,” she said. “If there’s anything that’s going to open him up to the world of NFTs and crypto it is that.” (Artist Nicole Buffett on CoinDesk TV) ... “'The market yesterday was a relief rally,' said Seema Shah, chief strategist at Principal Global Investors. By Thursday, she said, the realities of a more challenging environment for stocks were starting to settle in, including higher rates, difficult earnings comparisons and a stronger U.S. dollar that weighs on overseas earnings at multinational firms." (The Wall Street Journal)


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Damanick Dantes

Damanick was a crypto market analyst at CoinDesk where he wrote the daily Market Wrap and provided technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also a portfolio strategist and does not invest in digital assets.

James Rubin

James Rubin was CoinDesk's U.S. news editor based on the West Coast.