Where the Crypto Rich Spend Their Bitcoins
Sep 13, 2020
By Mina Down
A small but growing industry of luxury boutiques that cater exclusively to cryptocurrency holders has emerged. This article profiles a pioneer in this area: BitDials, which was the world’s first cryptocurrency-only online luxury store.
Most people who have spent any time in the crypto space are familiar with the “Lambo” meme. It refers to bitcoin enthusiasts’ tendency to buy Lamborghinis as a way of cashing in on the value of their crypto. However, as cryptocurrency pushes into the mainstream a lot more options are becoming available for holders looking to use their coins to buy luxury goods.
Charting the Growth of Cryptocurrencies
BitDials was started by an early crypto adopter and an established watch retailer in Germany in 2016. Instead of offering Lambos, BitDials started with high-end luxury watches. In the crypto space, however, four years is a long time. BitDials saw the 2017 ICO craze come and go and survived the bear market of 2018–19. During these years it steadily increased its merchandise.
Being in business during the ups and downs in the cryptocurrency market gives BitDials a unique perspective. I asked them if they have seen an increase in demand for luxury goods for purchase with crypto over the years.
“Yes, there is certainly a constant increase in demand for our products. Partially, this can be explained by a steady growing number of customers. Even after four years in this market, we still get new customers on a daily basis. At the same time, we have a high rate of returning customers. More than 60% of our new customers make a second purchase within 2 months.”
To keep pace with this growth, BitDials has steadily expanded its offerings. Initially, it was Rolex sport watches that were far and away the most popular with crypto holders. While the demand for Rolex remains unbroken, BitDials new customers show a growing interest in watches from other exclusive brands, such as Patek Philippe, Hublot, Audemars Piguet, IWC, Panerai, Roger Dubuis, Breguet, Breitling, Jaeger LeCoultre, Tag Heuer, Omega, Nomos, Urwerk, Chopard, Cartier and more. It seems Rolex is no longer the only must-have in the cryptocurrency community.
Building on the popularity of its watches, BitDials expanded into other types of luxury merchandise. Currently, crypto holders can buy designer handbags and belts, aged spirits, collectible cars, and even gold bars. BitDials is the only marketplace to offer these kinds of products for purchase in cryptocurrency. Customers can use BTC, BCH, ETH, XMR, LTC, DOGE, and DCR. All transactions are processed by BitPay, OpenNode, and GloBee.
Security and Safety a Top Priority
One major challenge facing any crypto-only store is proving trustworthiness to potential customers. Cryptocurrency users tend to be very privacy-conscious and tech-savvy. I did a significant amount of research to assess the credibility of BitDials and have only found positive reviews. The BitDials thread on Bitcointalk is an interesting archive of the growth of the boutique, and it chronicles how it responded to early skeptics. There are posts from users going back to 2016 describing their purchase experience and testifying to the trustworthiness of the store. There are also plenty of reviews on sites like Trustpilot and Chrono24. BitDials is also based in Germany, which has strict e-commerce laws.
BitDials is able to ship items extremely fast within the EU (typically next-day). They also ship worldwide with trusted companies like DHL, FedEx, and TNT. All shipments are fully insured and come with a tracking number. Products are delivered in their original boxes with all the available certificates and manufacturer’s warranty. For those who are the most cautious, it is even possible to visit Frankfurt am Main (Germany) to pay and pick up purchases in person at the BitDials brick and mortar location.
BitDials’ boutique does not always have the lowest prices on the market, although in some cases they do offer great deals. However, BitDials is currently the only full-featured marketplace for luxury goods accepting payments in cryptocurrencies.
An Alternative Investment Vehicle
Beyond simply a way to splurge on luxury items, BitDials also presents a unique way for cryptocurrency holders to diversify their investments. By purchasing collectible items, such as aged spirits, gold bars, collectible cars, and even jewelry and watches that contain precious metals, holders can help buffer their investments against the volatility of the cryptocurrency market. While this may not have been the intention of the founders of BitDials, the company nonetheless offers an important hedging tool against fluctuations in the crypto markets.
While the market for purchasing goods with cryptocurrencies is still relatively small, it is undoubtedly growing. This is partially an effect of increasing mainstream awareness of cryptocurrencies. It also an effect of how challenging it still is to “cash-out” crypto holdings into fiat. Moreover, purchasing luxury collectibles is a way to diversify investments and hedge against the volatility of cryptocurrency prices. As time passes and the use of cryptocurrencies continues to grow we will likely see shops offering more mundane goods for purchase besides luxury items. However, for now, it remains a market catering to the crypto rich.