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As the bitcoins are rising, luxury brands show interest in crypto payments.
Technology in Fashion
24 January, 2025
Table of contents
Recently, cryptocurrency has emerged as the next phenomenon in retail and financial services. The global cryptocurrency market is valued at $2,49 billion in 2024 and expected to reach $4,59 billion by 2028 with a CAGR of 16,5%. With bitcoin soaring, other cryptocurrencies like Litecoin and Ethereum are gaining more attention as viable payment options. Luxury brands, the front-runners of exclusivity and innovation, are starting to explore payments through cryptocurrency. They thrive at being an exclusive space, and cryptocurrencies give that to them. The secure pathway, anonymity, and decentralised location of the crypto are appealing to high-net-worth consumers. Also, blockchain technology offers authenticity and traceability.
Brands such as Balenciaga, Gucci, Off-White, Ralph Lauren, Burberry, Prada, Tiffany & Co., PacSun, TAG Heuer and Hublot have already incorporated crypto payments and accept crypto currencies. For instance, in 2022, Gucci started accepting Ethereum, Bitcoin, and other digital wallets in selective stores in the US. Hublot launched a limited-edition collection of watches that are purchasable through Bitcoin exclusively.
Luxury brands are seeking to attract more young customers who are technologically savvy, especially Gen Z and Millennials. These generations are enthusiastic about new technologies in their lifestyle including retail payments and seamless experiences. Off-White is allowing crypto payments in its flagship stores in Milan, London, and Paris, to cater to the younger and trend-following clients.
Luxury brands have to think on a global level and focus on a diverse range of audience. With cryptocurrencies, they can eliminate the currency conversion problem, decrease transaction fees, and create cross-border payments without any hustle. Farfetch enabled cryptocurrency payments across 37 countries, enabling international customers to pay without worrying about the currency exchange rate. Franck Muller released a Bitcoin-inspired “Encrypto” watch, which can be purchased only through Bitcoin, in collaboration with Regal Assets. This launch was focused on international crypto investors.
Blockchain technology ensures that transactions are more traceable, immutable, and secure. It will reduce the fraud risk and assure authenticity. LVMH Moët Hennessy - Louis Vuitton introduced Aura Blockchain Consortium as a shared blockchain platform for its brands including Bulgari, Tag Heuer, and Louis Vuitton. The platform enables the customers to verify the products’ authenticity.
Luxury brands are positioned as the innovators and trendsetters in their respective industries. By accepting cryptocurrencies, they are reinforcing their forward-thinking value proposition. It also enables the labels to align with the futuristic space such as NFTs and metaverse. Dolce & Gabbana released their “Collezione Genesi” collection of NFTs that are tied to their physical pieces. Balenciaga is accepting cryptocurrencies and also embraces digital fashion in the metaverse.
Cryptocurrencies have an unpredictable front with price fluctuations being the main and crucial challenge as they will affect profitability. There are also regulations and rules to be followed in different countries on cryptocurrencies, fueling complex international operations. The employees and consumers might need proper guidance and education on how to utilise and accept payments through cryptocurrency.
Cryptocurrencies not only serve as the payment method, but they are reshaping and strengthening the luxury ecosystem by leveraging blockchain technology. With that, luxury brands ensure their products’ authenticity to combat counterfeits by having digital certificates. NFTs, mostly powered by Ethereum, are also being used for exclusive loyalty rewards and exclusive drops.
Cover Image: Franck Muller's Bitcoin Watch, courtesy Franck Muller official website.