When Bitcoin Skyrockets, Luxury Brands Consider Crypto Payments

Printps plans to expand this crypto payment service to New York (photo: x @jacksondmura)

JAKARTA - Bitcoin, which continues to soar in value, is now attracting the attention of luxury fashion brands and retailers, who are starting to be interested in offering payments in cryptocurrencies to reach new wealth groups and build loyalty to crypto investors.

Only a handful of luxury brands have previously tried crypto payments, such as LVMH (the owner of Hublot and Tag Heuer) as well as Gucci and Balenciaga under the auspices of Dry. However, in recent weeks, Printemps, a French luxury department store, has teamed up with France's Binance and fintech firm Lyzi, to accept cryptocurrency payments such as Bitcoin and Ethereum in its stores in France.

This step is the first for European department stores and attracts the attention of brands and other retailers.

Regulators have long warned of high risk from cryptocurrencies due to their volatility. However, support from US President-elect Donald Trump, who is expected to provide e-currency-friendly regulations, pushed the Bitcoin value up to a record high, reaching 108,000 on Wednesday, December 18.

"Cryptocurrencies can be a way for brands to showcase themselves as innovative, not just 'old brands' selling only to baby boomers," said Andrew O'Neill, digital asset analyst at S&P Global Ratings.

Cryptocurrency payments are symbolic as most retailers convert funds back into conventional currencies such as euros or dollars to avoid the risk of volatility. However, for Bitcoin investors, luxury items such as designer bags or high-end watches could be an option to diversify their portfolios.

Several other innovative steps were taken by luxury brands:

Printeps plans to expand this crypto payment service to New York in March. In terms of experience, shipping company Virgin Voyages offers an annual ticket worth $120,000 that can be paid for with Bitcoin.

Bitcoin continues to skyrocket creating new opportunities for the luxury industry, particularly to reach the young generation and tech-savvy Asian consumers. However, whether this step is enough to deal with the volatility of the crypto market, it remains to be seen.