Market Analysis

The Fusion of Fashion and Bitcoin: Luxury Brands Dive into Crypto

Amos Simanungkalit · 18 Dec 2024117.3K Views

Image Credit: Reuters

Bitcoin's soaring value has sparked interest among luxury fashion brands and retailers, prompting more to explore cryptocurrency payments as a way to tap into new wealth and foster loyalty among crypto investors.

Until recently, only a few high-end brands like LVMH’s Hublot and Tag Heuer, as well as Kering’s Gucci and Balenciaga, had ventured into offering crypto payment options. However, the trend is gaining traction.

Upscale French department store Printemps recently partnered with Binance, the world’s largest crypto exchange, and French fintech company Lyzi to accept cryptocurrencies such as Bitcoin and Ethereum in its French stores, becoming the first European department store to do so. This move has caught the attention of other luxury retailers considering similar steps.

David Princay, president of Binance France, revealed that the collaboration has sparked interest among other luxury brands, with ongoing discussions. Meanwhile, S.T. Dupont, a luxury pen and lighter maker, plans to introduce cryptocurrency payments in two Paris stores before the holiday season.

In the travel sector, Virgin Voyages recently began accepting Bitcoin for a $120,000 annual sailing pass, marking its first crypto payment option.

Despite these developments, cryptocurrencies remain high-risk assets with limited real-world use, and their volatility has hindered widespread adoption as a payment method. However, U.S. President-elect Donald Trump’s expected support for crypto-friendly regulations has boosted Bitcoin to record-breaking levels. Analysts at S&P Global suggest that blockchain innovation could bring more predictability to cryptocurrencies, gradually changing perceptions.

A Push for Innovation

Luxury brands have historically catered to affluent tech-savvy shoppers by launching products like the Hermès Apple Watch or opening stores in Silicon Valley. Now, Bitcoin’s surge—recently topping $107,000—comes as the luxury industry seeks new growth avenues amid a significant slump.

Accepting crypto payments allows brands to position themselves as innovative and appealing to younger, tech-driven consumers. “It’s a way to break free from the image of being a ‘stuffy old brand’ catering to boomers,” said Andrew O’Neill, digital assets lead at S&P Global Ratings.

While the payment option is often more symbolic than practical—retailers typically convert crypto funds to traditional currencies to mitigate volatility—luxury goods remain an attractive choice for Bitcoin investors looking to diversify their portfolios.

Reflecting this trend, Balenciaga recently launched a leather cardholder designed for crypto wallet company Ledger’s “Stax” hardware. Priced at €350 ($368), it features a keychain, an Eiffel Tower charm, and an NFC chip under the brand’s logo. Ledger’s hardware ranges from $79 for the “Nano” version to $399 for the “Stax” with a curved touchscreen.

Reaching Younger Audiences

Kering’s digital chief, Gregory Boutte, described the company’s approach to technology as “test and learn,” emphasizing the importance of innovation in connecting with younger and Asian clientele. Gucci, one of Kering’s flagship brands, has accepted payments in 10 cryptocurrencies across the U.S. since 2022.

Printemps is also expanding its crypto payment services internationally, with plans to open a multibrand retailer in New York’s Wall Street district by March.

The luxury sector’s initial interest in crypto payments began with Bitcoin’s late 2021 rally, which led brands like Tag Heuer and Gucci to accept cryptocurrencies for select purchases in the U.S.

However, not all crypto users are drawn to luxury brands’ efforts to cultivate closer relationships with clients. Influencer and crypto investor Eunice Wong, who purchased luxury watches like the Audemars Piguet Royal Oak using digital assets, prefers the convenience of the secondary market over traditional retail experiences. “If I want to buy, I’ll do it on the secondary market. I want it now,” Wong explained.