You may be wondering why is there popping champagne in the crypto space as we continue ushering in the new year? The crypto market has been on a frenzy with leading cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) enjoying a rollercoaster ride in recent weeks.
After breaching the all-time high (ATH) price of $20,000 in mid-December, Bitcoin’s trigger towards the $30,000 threshold was pulled, pushing the orange coin to levels not seen before. This bull run saw the price surge past $33,000 and recently on to a high of more than $39,000.
Thanks to an overwhelming appetite by institutional investors like Microstrategy and economic initiatives such as quantitative easing (QE), Bitcoin has been on overdrive as it has scaled heights not seen in its twelve-year existence.
Ethereum, the second cryptocurrency based on market capitalization, has also not been left behind in making eye-catching moves. ETH recently made a whopping gain of almost 40% in 24 hours to smash the $1,000 level and this is the closest it has gotten to its historical ATH of $1,400.
Its price surge has been boosted by the launch of Ethereum 2.0 earlier last month, which seeks to offer a transition to the proof-of-stake consensus mechanism from the current proof-of-work. Moreover, a booming decentralized finance (DeFi) sector has been the icing on the cake.
Without a doubt, the crypto market has been in the limelight based on the impressive moves being made. For instance, Bitcoin’s price rally towards $30,000 was recently featured on the front page of Financial Times.
No wonder the US$349.1 billion luxury goods market is jumping on the crypto bandwagon.
Tapping into a new pool of wealth
You may have heard that cryptocurrencies are the new kid on the block in the financial scene. Some of their attributes, like a store of value and medium of exchange, are making them game-changers.
Customer satisfaction is a crucial factor in the luxury market and this springs up in different elements like the form of payment used. Cryptocurrencies like Bitcoin have triggered a new breed of wealthy persons based on their impressive surge. As a result, the luxury sector is paying attention to tapping into this new pool of wealth.
For instance, a sleek 52-foot Lagoon catamaran yacht was sold for USD$839,000 in Florida, United States. Half of the amount was paid in Bitcoin in November last year. This move shows that crypto investors who have hit the jackpot in the present bull run are trading their proceeds for luxury items like Lamborhinis and lavish homes.
Cryptocurrencies also offer lower transaction costs and this explains why some consumers favor them. As a result, the luxury market seeks to optimize their satisfaction rates by offering a crypto payment option.
We all know that millennials are associated with splurging habits and this is likely to be boosted by cryptocurrencies based on their surge in value. Luxury brands have comprehended this reality and this explains why they are favoring cryptos.
Cryptocurrencies offer wealthy investors an ideal avenue to cash in
Vegas Auto Gallery, a Nevada-based luxury auto dealer, has emerged as a playground for affluent BTC investors wishing to cash in. The auto dealer recently smiled all the way to the bank after a client purchased a 2019 Bugatti Chiron and a 2017 Pagani Huayra Roadster and paid more than $6 million in Bitcoin. The owner Nick Dossa also disclosed that nearly 3% to 5% of the dealership’s revenue came from BTC transactions.
He added that his business was not at any risk because of accepting Bitcoin payments. Dossa in fact praised the leading cryptocurrency because it provides an easy way to transact.
Cryptocurrencies seem to be the icing on the cake in car dealerships. This is because more than 100 car dealers in the United Kingdom (UK) like Saxton4x4, Benz Bavarian, and Redline Specialist Cars sealed a deal with London-based AutoCoinCars to enable clients purchase their preferred models using cryptos.
Isn’t it interesting how cryptocurrencies are finding their way into car dealerships? This shows a change in consumer trend as an increasing number of them are searching for ways to spend their digital assets and this is where the luxury market comes in.
With cryptocurrencies like Bitcoin and Ethereum continuously making airwaves on the global scale based on their impressive bull run, it looks like the sky’s the limit. Luxury brands are no longer oblivious to this reality. This is why they seek to tap the liquidity of millionaires in the crypto space by offering payment options in the form of digital assets.
Swiss luxury brands, such as Hublot, House of Wines, and Kessel Auto, among others have been grabbing the opportunity brought forth by the crypto market with both hands in their quest to attract an increasingly affluent and elevated customer base. Therefore, a shift to cryptocurrencies by the luxury market is the tip of the iceberg because, in the near future this might be the norm.