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The Crypto Wealthy Are Luxury’s New Big Spenders

The swelling ranks of the crypto-rich are boosting US luxury sales, and unlike previous generations of tech wealth, many are splashing out large sums on fashion that gets them noticed.
Guests talk around a pool at a swanky venue in Miami.
A crypto event in Miami. (World Red Eye)

On a recent ski trip, Meltem Demirors, a crypto investor and chief strategy officer of CoinShares, a digital asset management firm, skipped the usual outdoor brands and wore a full-body Fendi jumpsuit. It wasn’t her first choice, however.

“The only reason I have the Fendi skisuit is because Prada doesn’t make one,” she said.

Crypto isn’t just changing the tech industry; it’s changing how it dresses too. While there isn’t just one style across the crypto community, many in it value fashion as a means of self-expression and are willing to spend on it. Of course much of the industry is also young, newly wealthy and looking to broadcast that success, often with luxury products.

Demirors, a New Yorker with a predilection for black, said she likes the ease of Prada’s clothing, though she also gravitates toward Bottega Veneta and occasionally Louis Vuitton. Her friends in the industry have their own preferences. One favours Fendi as her go-to. Another who is more conservative opts for Chanel and Balmain suits.

It’s not just women buying up high-end labels either. “Big @dior guy,” Cooper Turley, a young crypto millionaire and influential strategist in the space (who recently issued an apology for old tweets containing racist and homophobic slurs), captioned an Instagram post where he’s in full Dior in front of a Dior store.

“People are living out the tech version of a rockstar lifestyle,” Demirors said. “There are a lot of people who will have no issue going to a designer store and spending $50K, $100K in one go.”

It helps that the surging value of crypto assets has generated a huge amount of disposable wealth in recent years, with 2021 reaching record highs. Bitcoin broke the $60,000 mark and far outpaced other types of investments such as stocks and gold. Ether, the native currency of the Ethereum blockchain, started 2021 at less than $1,000 and closed it at nearly $4,000. Non-fungible tokens (NFTs) of cartoon apes or pixelated punks sold for millions in some instances. Altogether, the value of the world’s cryptocurrencies topped $3 trillion. Only recently have they plummeted back toward earth.

Even if crypto assets still tend to be concentrated in the hands of a relative few — mostly men — all that money helped to fatten the ranks of the crypto-rich, who look to be playing a major role in the strong growth of the US luxury market. In Miami, which has become a hub of the crypto industry, as much as one-quarter of luxury sales over the past year may have been driven by crypto riches, said Jefferies analyst Flavio Cereda in a Dec. 15 research note.

“We believe that, beyond the natural impact of so-called ‘pent-up demand’...something else is at play,” he wrote. “First and foremost, crypto.”

In a follow-up note on Jan. 24, he wrote that, despite the latest plunge in the crypto market, the trend is “likely to remain a driver of significance.”

A hefty share of new wealth has also gone toward luxury goods as the pandemic limited opportunities to splash out on expensive trips and other experiences, according to Federica Lavato, a leader in the fashion and luxury goods practise at Bain & Company.

Fashion is beginning to take notice. Fendi just teamed with Ledger, a maker of hardware wallets for securely storing crypto assets, on branded accessories. Philipp Plein announced last year that it would begin accepting cryptocurrency as payment. Brands such as Gucci and Dolce & Gabbana are releasing NFTs, which appeal most to the crypto faithful.

Crypto Fashion

Donté McGuine, a celebrity stylist who has worked with rapper Vic Mensa and actor Luna Blaise, said he’s taken on four clients in the crypto industry in the past year, including Demirors, and gets inquiries from others all the time. While he was hesitant at first, they convinced him with their willingness to push limits.

“These girls, they want Comme des Garçons, they want Bottega, they want Balenciaga,” he said. “They’re not buying the hats and the shoes. They’re buying the runway pieces.”

At the Rick Owens and Tom Ford stores in the Miami Design District, associates said they tend to see an influx of shoppers around crypto conferences in the city.

Those brands are among the ones her younger clients in the crypto industry frequently request, said Victoria Cárdenas Hitchcock, a San Francisco Bay Area stylist and personal branding consultant. The interest in Rick Owens tends to start with the sneakers, she said.

It’s a radical departure from the tastes of her traditional tech clients.

“None of them were asking to stand out with bright colours, with patterns, with graphics,” she explained. “This is more of a lifestyle.”

While they may be the easiest to spot, the “over-the-top wealth signifiers” tend to be a minority in the crypto community, according to Raihan Anwar, head of community and culture of Friends With Benefits, a well-known crypto group centred on crypto’s intersection with culture. Many members keep their looks more toned down, he said, though they are still spending on fashion. Some members buy streetwear and sneakers. Others lean into labels such as Issey Miyake Pleats Please or Acronym.

Magical Internet Money

The clothing preferences in crypto stem from its roots online, according to Demirors, and personal style is an important component in how members of the community view each other. The interest in fashion cuts across gender lines and professional titles — even top executives go for designer looks.

“The industry evolved so much around memes and meme culture and internet culture,” Demirors said. “Generally, I think people want the way they physically look and the way they operate in the real world to reflect their online persona.”

Many in the business are flush with the funds to do so.

“I work with rich girls all the time, but this new wave of crypto money, it’s a little bit richer,” McGuine said.

His crypto clients typically don’t even ask about prices, he added. The same applies to many men in the industry.

For some, dropping huge amounts on luxury goods seems to be an end in itself. When controversial crypto figure Richard Heart isn’t marketing his polarizing and sometimes criticized cryptocurrency token, he’s posting unboxing videos about $65,000 luxury hauls on YouTube or images of himself in pricey clothing on Instagram.

“I want something that screams at a distance,” he said in an interview about his shopping habits. He likes recognizable logos and prints, such as Burberry’s check pattern and Louis Vuitton’s monogram, and owns eye-catching items like Balenciaga’s NASA backpack and a pair of crystal-crusted Prada shoes. “I’ve never seen any crystal sparkle as hard as these shoes,” he said.

Not everyone in crypto is fabulously rich, and values can seemingly vanish in an instant if the market falls. But there is enough wealth in the industry, and enough interest in fashion, that Demirors believes brands should be doing more outreach to the crypto community, establishing relationships in the space and viewing key figures as influencers. After all, it’s a desirable customer base with an inclination toward conspicuous consumption.

“We work in magical internet money, so I think our propensity to spend large sums of money on random, useless things that are entertaining and largely impractical and not useful is much higher because we don’t treat our money in the same way that people in other industries do,” Demirors said.

Further Reading

Young, wealthy professionals have flooded Miami and Austin over the last 18 months, and luxury brands are following the money. But selling to a newly minted tech millionaire isn’t always so simple.

Philipp Plein is going for it, and some of the industry’s biggest brands have considered accepting Bitcoin, Ethereum and other blockchain-based payments. But the risks might still outweigh the benefits for more established players.

About the author
Marc Bain
Marc Bain

Marc Bain is Technology Correspondent at The Business of Fashion. He is based in New York and drives BoF’s coverage of technology and innovation, from start-ups to Big Tech.

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