Watch Brands Keep the Crypto Faith

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

“Crypto payments are one more service we offer our customers, even if many will never use it,” Frédéric Arnault, chief executive of TAG Heuer, said during a video interview in early July from the brand’s offices in Eysins, Switzerland. “We have already sold a few hundred pieces in cryptocurrency.”

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

The brand, owned by the luxury group LVMH Moët Hennessy Louis Vuitton, announced in May that its U.S. website 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 sale price into dollars for payment to the brand. “We are not paid in cryptocurrency,” Mr. Arnault said.)

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

Overall, the crypto market has lost two thirds of its value in recent months, dropping to $971.6 billion on July 17 from a high of $3 trillion in November 2021, according to CoinMarketCap, a crypto data tracking site.

Hublot was an early adopter of crypto among watch brands. In 2018, it accepted Bitcoin for its limited edition Big Bang Meca-10 P2P, a watch pegged to the 10th anniversary of the currency, in collaboration with OS Limited, a digital asset brokerage.

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 haven’t noticed a direct repercussion on our sales as a result of the volatility in these markets,” Ricardo Guadalupe, chief executive of Hublot, wrote in an email.

In the wider watch world, few resellers take crypto payments, although accepts five currencies through an arrangement with the payment processor Net Cents.

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

“We may have a couple of lots in a watch sale accepting crypto, but it is an exception,” Mr. Colson said.

Yet many watch brands and related businesses acknowledge that accepting crypto is one way to attract a young and digital-savvy clientele. (After all, one survey, released in January, showed that 36 percent of all millennials in the United States owned cryptocurrency.)

At TAG Heuer, “the cryptocurrency payment was a first step in our strategy regarding NFTs and the metaverse,” Mr. Arnault said. The second step was the June 15 introduction of the “viewer” feature on the brand’s Connected Calibre E4 smartwatch, which allows users to display their NFT (nonfungible token) artworks 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 that audience.”

But the NFT market, which is closely connected to cryptocurrencies, has suffered in the current downturn, too.

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 happened. “Due to market conditions,” Benjamin Arabo, the company’s chief executive, wrote in an email, “we have decided to push the auction to Aug. 22.”

And OpenSea, a marketplace for NFTs and crypto collectibles, announced in mid-July that it was laying off 20 percent of its 275 employees. Last year it handled what was to have been the industry’s first NFT watch sale, an offering by the watch veteran Jean-Claude Biver that ultimately was withdrawn because bids did not reach the undisclosed reserve price.

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

Still, some businesses are taking a long 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 in-house venture capital arm, called Christie’s Ventures, to invest in start-ups whose technologies help collectors to acquire art — digital or otherwise — and to use digital assets across blockchains.

Mr. Arnault of TAG Heuer said, “The market will decide which NFT collection or coin 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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