With Bitcoin's Rally, Luxury Firms Embrace Cryptocurrency Payments

 

Bitcoin's surge has attracted the attention of high-end fashion brands and retailers, propelling them to include cryptocurrencies as a payment method to gain new wealth sources and the loyalty of cryptocurrency investors.

 

In recent weeks, Printemps, a French luxury department store, announced a partnership with the world's largest cryptocurrency exchange Binance, and French fintech company Lyzi: its French stores accept cryptocurrencies such as Bitcoin and Ethereum. The move sparked other brands and retailers interest to get involved.

 

According to David Princhay, president of Binance France, the exchange has received many calls seeking partnerships and negotiated with other luxury brands.

 

Not coincidentally, luxury lighter and pen maker ST Dupont said on Reuters that two of its Paris stores planned to accept cryptocurrency payments.

 

Cruise line Virgin Voyages launched its first product using Bitcoin as a payment option - a $120,000 annual pass.

 

While regulators have warned of the high risks and volatility of crypto payments, luxury brands require them.

 

Bitcoin reached a high of $107,000 on Monday (Dec. 16), becoming a new source of wealth. Simultaneously, the luxury goods industry was in its biggest recession and needed to find new sources of growth.

 

Cryptocurrency payments can transform corporate image from old-fashioned to up-to-date, according to Andrew O'Neill, digital assets lead analyst at S&P Global Ratings. Most shoppers preferred to pay through electronic transactions rather than cash transactions.

 

Gregory Boutte, chief client and digital officer for luxury conglomerate Kering (EPA: PRTP) emphasized that embracing new technology is key to attracting younger and Asian customers.

 

In terms of technology adoption, Kering's star brand Gucci allowed customers to buy most products in the US with 10 cryptocurrencies from 2022. Balenciaga launched a leather card case designed to hold crypto wallet company Ledger's “Stax” hardware.

 

LVMH's Tag Heuer and Gucci have allowed some clients in the US to pay with cryptocurrencies since the rise of Bitcoin in late 2021.

 

As for Bitcoin's unforeseen risks, S&P analysts reassured that blockchain innovations could enhance the predictability of cryptocurrencies.

 

Additionally, analysts advised Bitcoin investors to use luxury products for portfolio diversification.