Cryptocurrency and Luxury Fashion Aren’t All That Different

Disclaimer: The opinions in this article are entirely my own and do not reflect investment recommendations.

A few small things have changed in the past year: we are living through a global pandemic and figuring out how to deal with it, people started going outside again, and oh yeah — there’s a thing called non-fungible tokens (NFTs) that might make you a millionaire. Welcome to the crypto boom.

Cryptocurrency has been around for a while, but 2021 has really changed the game for this status-symbol currency. With Elon tweeting all praise for Crypto (most of the time), the financial markets have valued various forms of this currency at elevated prices. Sound familiar? At a quick glance, crypto and luxury fashion have glaring commonalities based on influence, cost, and scarcity:

• Both have an “influencer” network — While crypto prices swing based on Elon’s tweets, brands like Khaite can charge $1,500+ for a simple knit cardigan once Katie Holmes wears it out in Manhattan
• Bitcoin can cost $30K and people will still buy it (and the price will keep on rising). Chanel can charge $7K+ for a handbag and people will still buy it. It’s all about the status symbol
• Have you ever tried walking into Hermes and simply asking to see their Birkin bags? You’d probably get an equally unsuccessful result trying to buy a Cryptopunk NFT

In a world where status symbols are all the rave, the similarities between owning luxury fashion pieces and buying crypto are exciting and endless. People inherently seek to gain more social capital — what is a better way to do that than by blurting out your Ethereum gains, or posting an Insta story of your new Louis Vuitton bag? Both will appreciate in value and serve as your investment pieces for years to come.

With the commonalities oozing all around, this is a great time for luxury brands to dip their toes into crypto. Most fashion houses are a bit late to the game when it comes to revolutionizing their products or selling processes, so it’s unsurprising that crypto has not become a more common use of payment in this sector.

I’ve said this in my last blog post and I’ll say it again — luxury brands can learn a thing or two from Silicon Valley. The Holy Grail of LV, Hermes, and Chanel can optimize their earnings while catering to a selective market by proving themselves to be tech-savy. In the past, these brands have catered to the older generation simply because those were the customers with cash-heavy wallets. Today’s younger generation is making more money than ever before and has the means to spend it on absolutely anything (RE: Cryptopunk NFTs).

Hublot, one of the few brands to accept Bitcoin, offers exclusive products for purchase via bitcoin only. This is perhaps one of the best ways to capture new customers in this market — what better way to attract the committed shopaholics than by offering exclusive pieces in an exclusive way? This could serve as a prominent digital marketing tool for certain luxury items and directly target the Millennials with crypto-heavy wallets.

An easy way that fashion brands can utilize crypto is by creating a Luxury NFT. Think of it as the verified check on Instagram. Influencers could buy the Luxury NFT as a means of attaining VIP invites to special events or fashion shows (e.g. LVMH NFT would provide access to exclusive events for any of its associated brands). Naturally, the NFT should be priced competitively so that the large fashion houses can maintain an essence of luxury, uniqueness, and scarcity.

So, why not catch those consumers and evolve your brand into the digital age? Start accepting crypto and see how much sales soar even further (you might even convince the new-age crowd to buy a Chanel NFT ;)