As bitcoin rises, luxury brands are thinking about taking cryptocurrency payments

High-end fashion companies and stores have taken notice of Bitcoin’s skyrocketing value, which has increased interest in accepting cryptocurrency as payment in order to attract new riches and foster investor loyalty.

Only a small number of luxury businesses, such as LVMH (LVMH.PA), Kering-owned (PRTP.PA), and new tab watch brands Hublot and Tag Heuer, as well as new tab fashion brands Gucci and Balenciaga, had dabbled with cryptocurrency payment possibilities until recently.

Printemps, a high-end French luxury department store, became the first department store in Europe to accept cryptocurrencies like bitcoin and ethereum in its stores in France after announcing in recent weeks that it was partnering with Binance, the largest cryptocurrency exchange in the world, and Lyzi, a French financial technology company. Other retailers and companies have taken notice of the trend, which coincides with the growth in bitcoin, and are expressing interest in joining in.

According to Binance France president David Princay, “there have been quite a few calls – it’s generated interest,” and the firm is currently in negotiations with additional premium names.

Before the holidays, luxury pen and lighter manufacturer S.T. Dupont told Reuters that it hopes to start taking bitcoin payments at two of its Paris locations.

This month, Virgin Voyages, a cruise line, launched its first product that accepts bitcoin as a form of payment: a $120,000 annual pass that allows passengers to sail on its ships for up to a year.

Bitcoin and other cryptocurrencies are high-risk assets with few practical use, as regulators have long cautioned. Another obstacle to widespread acceptance as a payment method has been high volatility.

But record-breaking increases in bitcoin have been driven by promises of support from U.S. President-elect Donald Trump, who is anticipated to implement more benevolent e-currency regulations. The story is beginning to change, according to S&P analysts, who point out that blockchain technology in financial markets may make cryptocurrencies more predictable.

INTRODUCING NEW BRANDING

For a long time, luxury brands have tried to appeal to wealthy tech industry consumers by setting up shop in posh Silicon Valley malls and producing goods like the Hermes (HRMS.PA), opens new tab The Apple Watch, for instance, is a new tab-connected watch that mixes the iconic, stitched leather straps of the French Birkin bag manufacturer with computing giant Apple’s (AAPL.O).

Bitcoin’s recent highs, which topped $107,000 on Monday, have created new riches as the luxury market looks for new growth prospects amid its worst downturn in years.

Companies may position themselves as progressive rather than as “a stuffy old brand that’s only selling to the boomers” by accepting cryptocurrency payments, according to Andrew O’Neill, head analyst for digital assets at S&P Global Ratings.

The opportunity to pay is still mostly symbolic. While most consumers view payment methods as “something that’s been solved” already by services like PayPal (PYPL.O), opens new tab, or Venmo, retailers typically convert the cash back to euros or dollars to counter volatility risks, according to O’Neill.

However, analysts suggest that luxury items like a high-end watch or designer handbag are a clear choice for portfolio diversification for bitcoin investors who have witnessed a significant increase in the value of their investment.

Balenciaga recently released a leather card holder made to accommodate “Stax” technology from cryptocurrency wallet business Ledger, indicating an increasing interest from fashion brands. Retailing for 350 euros ($368), the black leather accessory comes with an NFC chip installed beneath the brand logo, as well as a keychain and an Eiffel Tower charm. The freshly designed Stax Crypto hardware from Ledger, which has a curved touch screen and retails for $399 at Best Buy (BBY.N), opens a new tab. The “Nano” version, which resembles a USB key, costs $79, while the company’s “Flex” hardware, which looks like a miniature Amazon Kindle, costs $249.

CONNECTING WITH YOUNG CLIENTS

Luxury conglomerate Kering’s chief client and digital officer, Gregory Boutte, has characterized the company’s approach to technology as “test and learn” as opposed to “wait and see.” He underlined that adopting new technology is essential to connecting with Asian and younger customers.

Since 2022, Kering’s flagship brand, Gucci, has allowed customers to buy the majority of its merchandise in the US using ten cryptocurrencies.
Printemps intends to open a multibrand store in the Wall Street neighborhood of New York City in March as part of its efforts to bring its cryptocurrency payments service there.

When Bitcoin gained popularity in late 2021, luxury businesses took an immediate interest in it. The following year, Gucci and Tag Heuer, which were then led by LVMH luxury heir Frederic Arnault, began to accept cryptocurrency payments for select sales made in the US.

Eunice Wong, a cryptocurrency enthusiast and influencer who goes by “Eunicorn,” is one person who recently used digital assets to buy luxury goods.

Wong claimed that she purchased a number of expensive timepieces this year, including an Audemars Piguet Royal Oak model, using cryptocurrency. However, she would rather avoid typical retail establishments and sales procedures than be enticed by luxury businesses looking to establish a stronger relationship with their customers. She thinks that takes too long. She told Reuters, “If I decide to buy, I’ll buy on the secondary market, not through them.” “I want it right now.”