Skift Take
Bitcoin's growth has made a lot of people very wealthy, and more companies are looking at tapping into what could be a lucrative market. The problem, though, is the unpredictable nature of cryptocurrency markets means accepting these virtual currencies comes with considerable risk.
The growth of cryptocurrencies as an asset class has helped create a new type of wealthy individual.
The so-called crypto-affluents are becoming more attractive to luxury brands and retailers which are experimenting with accepting these digital payment methods.
Yacht dealer Denison and watchmaker Chronoswiss were two of the first luxury brands to directly accept cryptocurrencies.
"There are bitcoin users of all ages, across all continents buying and selling luxury goods, including cars and villas. There's absolutely no reason why a seller should be wary of accepting bitcoin,” Denison founder Bob Denison told Luxury Daily.
The problem for Denison and others is the volatility of cryptocurrencies. Values fluctuate wildly, meaning that accepting them comes with a greater financial risk than traditional currency for sellers. In December, one bitcoin was worth more than $19,000; in the three months since, its value has halved.
It's hard to run a business if you don't know how much money you actually have and it doesn't make financial sense to sell a yacht for bitcoin if the value of a bitcoin is not stable.
It appears some of these brands, however, are more interested in solidarity with the cryptocurrenc
