See brands Keep the Crypto Faith

Although the value of cryptocurrencies has fallen 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, although many will never use it,” said Frédéric Arnault, CEO of TAG Heuer, during a video interview in early July from the brand’s offices in Eysins, Switzerland. “We’ve already sold a few hundred pieces in cryptocurrency.”

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

The brand, owned by luxury group LVMH Moët Hennessy Louis Vuitton, announced in May that its US website would accept more cryptocurrencies, including Bitcoin and Ethereum, for sales up to the equivalent of $10,000. (But BitPay, the crypto payment processor that handles transactions for TAG Heuer, actually converts the sale price into dollars for payment to the brand. “We’re not 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; afterwards the course 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 a low of $20,000 late last month from a record high of $64,000 in November 2021.

Overall, the crypto market has lost two-thirds of its value in recent months, falling to $971.6 billion as of July 17 from a peak of $3 trillion in November 2021, according to CoinMarketCap, a crypto data tracking website.

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 tied to the 10th anniversary of the currency, in partnership 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 any direct impact on our sales as a result of the volatility in these markets,” Ricardo Guadalupe, CEO of Hublot, wrote in an email.

In the wider viewing world, few retailers accept crypto payments, although PrestigeTime.com accepts five currencies through an agreement with 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 watch designer Gerald Genta held this spring. But according to Benoît Colson, international specialist at Sotheby’s Paris, none of the buyers chose that option.

“We might have a couple of lots in a watch sale that accept crypto, but that’s an exception,” Mr. Colson said.

Still, many watch brands and related businesses recognize that accepting crypto is a way to attract a young and digitally savvy clientele. (After all, a survey released in January found that 36 percent of all millennials in the U.S. owned cryptocurrency.)

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

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

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

Jacob & Company, which sold its first NFT watch in 2021, had announced that Astronomia Metaverso, a collection of eight physical and digital watches, would go on sale in June on the UNXD platform – but the sale never happened. “Due to market conditions,” Benjamin Arabo, the company’s CEO, wrote in an email, “we have decided to move the auction to August 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 would have been the industry’s first NFT watch sale, an offer from watch veteran Jean-Claude Biver that was ultimately withdrawn because bids fell short of the undisclosed reserve price.

Crypto investor confidence could also be further shaken as a number of crypto lenders and brokers seek bankruptcy protection, including filings in July by 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 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 internal venture capital arm, called Christie’s Ventures, to invest in startups whose technologies help collectors 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.”