Watch brands keep faith in crypto

Even though the value of cryptocurrencies has fallen in recent months, watch brands that accept digital assets for payment, including TAG Heuer, Hublot and Breitling, show no signs of changing their minds.

“Cryptopayments are one more service we offer our customers, although many will never use it,” TAG Heuer CEO Frédéric Arnault said in a video interview in early July from the offices of the brand in Eysins, Switzerland. “We have already sold a few hundred cryptocurrency coins.”

[Confused about cryptocurrency? Here’s an explanation.]

The brand, owned by luxury group LVMH Moët Hennessy Louis Vuitton, announced in May that its US site would accept several cryptocurrencies, including Bitcoin and Ethereum, for sales up to the equivalent of $10,000. (However, BitPay, the crypto payment processor that handles transactions for TAG Heuer, actually converts the selling price to dollars for on-brand payment. “We don’t get paid in cryptocurrency,” Arnault said. .)

A TAG Heuer customer who chooses to pay in crypto has a 15-minute window at checkout to complete the purchase at a locked exchange rate; thereafter the rate will be updated and may be quite different. The window, Arnault said, acts as a hedge against the extreme volatility in the value of cryptocurrencies: One Bitcoin, for example, fell to lows of $20,000 late last month against its record high of $64,000 in November 2021.

Globally, the crypto market has lost two-thirds of its value in the past few months, falling to $971.6 billion on July 17 from a peak of $3 trillion in November 2021, according to CoinMarketCap, a crypto data tracking site.

Hublot was an early adopter of cryptography among watch brands. In 2018, he accepted Bitcoin for his limited-edition Big Bang Meca-10 P2P, a watch tied to the currency’s 10th anniversary, in conjunction with OS Limited, a digital asset broker.

The brand’s new 200-piece Big Bang Unico Essential Grey, priced at $20,900 and offered online only, is among the watches that can be purchased with crypto as Hublot accepts payments up to the equivalent of 30 $000.

“We have not noticed a direct impact on our sales due to the volatility in these markets,” Hublot chief executive Ricardo Guadalupe wrote in an email.

In the wider watch world, few retailers accept crypto payments, although accepts five currencies through an agreement with payment processor Net Cents.

As for auction houses, Sotheby’s has announced that it will accept payment in cryptocurrencies during “Icon of Time”, a three-part auction of drawings and watercolors by watch designer Gerald Genta held last spring. But according to Benoît Colson, international specialist at Sotheby’s Paris, none of the buyers chose this option.

“We may have a few lots in a sale of watches that accept crypto, but that’s an exception,” Colson said.

Yet many watch brands and related businesses recognize that crypto acceptance is a way to appeal to a young, digital-savvy clientele. (After all, a survey, published in January, show that 36% of all millennials in the United States owned cryptocurrency.)

At TAG Heuer, “cryptocurrency payment was a first step in our NFT and metaverse strategy,” Arnault said. The second step was the introduction on June 15 of the “viewer” function on the brand’s Connected Caliber E4 smartwatch, which allows users to display their NFT (non-fungible token) artwork by connecting their watches to their crypto wallets.

“NFT collectors are a new audience for us,” Mr. Arnault said, “and we will continue to engage with this audience.”

But the NFT market, which is closely related to cryptocurrencies, has also suffered from the current downturn.

Jacob & Company, which sold its first NFT watch in 2021, had announced that its Astronomia Metaverso, a collection of eight physical and digital watches, would be sold in June on the UNXD platform – but the sale never took place. “Due to market conditions,” Benjamin Arabo, the company’s chief executive, wrote in an email, “we have decided to push the auction to August 22.”

And OpenSea, a marketplace for NFTs and crypto collectibles, announced in mid-July that it was laying off 20% of its 275 employees. Last year he handled what was to be the industry’s first NFT watch sale, an offer from watch veteran Jean-Claude Biver that was ultimately withdrawn as the offers failed to reach the price of undisclosed reserve.

Crypto investor confidence may also be further shaken as a number of crypto lenders and brokers seek bankruptcy protection, including July filings by New Jersey-based cryptocurrency lender Celsius Network with a deficit of $1.19 billion on its balance sheet, Singapore-based crypto hedge fund Three Arrows Capital and New Jersey-based crypto broker Voyager Digital Limited.

Yet, some companies take a long-term view of digital assets and the possibilities of blockchain technologies.

Christie’s, which has seen its own NFT sales decline this year, announced on July 18 that it had created an internal venture capital arm, called Christie’s Ventures, to invest in start-ups whose technologies help collectors acquire money. art – digital or otherwise – and to use digital assets through blockchains.

Mr. Arnault of TAG Heuer said: “The market will decide which NFT collection or piece will remain in the next five to 10 years.”

“We will continue to invest in crypto, in NFTs and in blockchains,” he added, “because we believe these technologies are here to stay.”

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