Why the Luxury Fashion Industry Wants a Piece of the $2 Trillion Crypto Market

Luxury fashion is one of the fastest changing industries in modern history. From groundbreaking sustainable materials to NFT art that we still don't fully understand yet, it has always been one of the very first to adopt the newest technologies and innovations that the world has to offer - and the crypto market is certainly no different.

While cryptocurrency is all the rage these days, its history actually stretches as far back as the '80s when American computer scientist David Chaum created ecash. The public weren't too keen to adopt this brand new way of paying but it paved the way to Bitcoin, which was made three decades later by pseudonymous developer Satoshi Nakamoto. And the rest is history.

So, what has this got to do with high-end fashion? Well, companies like Bvlgari and Hublot were the very first to take Bitcoin seriously. In fact, you can actually buy their expensive timepieces using it. Doing things digitally also has a lot of environmental implications as well as it helps reduce a brand's carbon footprint. Earlier this year, Prada teamed up with Cartier and LVMH to establish the Aura Blockchain Consortium. Through the use of unique and advanced tech, these three luxury giants have come together to create a Blockchain solution to combat counterfeiting. This also means that consumers can follow a product's complete lifecycle from start to finish, and thus strengthen their relationship with the brands that they love.

"Cryptocurrency has been a revolutionary game changer since its development and ongoing, yet cautious adoption as a form of payment especially within the world of luxury fashion." explains Vincent Quan, Associate Professor Fashion Business Management at The Fashion Institute of Technology. "Fashion brands have been on a quest to grow their Millennial base while capturing younger, Gen Z consumers. Fortunately, these two market segments have an affinity to crypto which bodes well for the entire fashion industry."

Earlier this week, crypto's value rose to a whopping $2.06 trillion according to CoinGecko. Bitcoin soared to $48,152 which is the highest level since May 16th, while other e-currencies increased considerably as well. This market is growing at an exponential rate, and coupled with other Blockchain-based technologies such as the aforementioned NFT, the fashion game is more ready than ever to place their bets on it. Recently, Nike adopted the tech to create digital shoes that are fully virtual. Louis Vuitton also began adopting Non-Fungible Token to track the ownership of its luxury goods.

Emerging companies like RTFKT are pushing the NFT angle as hard as they can. Whether it's emphasising their environmentally-friendly elements or attracting art collectors, potential investors are rolling in by the dozen. Even OGs like Jeff Staple are buying in to the trend, releasing his own virtual sneaker as an NFT and, effectively, change the nature of the sneaker and streetwear game in the process.

As of August 2021, adoption of cryptocurrencies in the luxury consumer market is still pretty low. With that said, due to its ever-rising value and other innovations like NFTs, old school labels are finding it harder than ever to ignore new school tech like this.

In an interview with Vogue, research company Forrester's Martha Bennett explains, "Overall, there is a trend towards representing physical assets in a digital form. I would say to a luxury house, be aware of what’s going on because if you don’t become directly involved, someone else might."

It's an exciting time for luxury fashion especially for the younger generation. Whether the industry will fully adopt crypto remains to be seen, but one thing is definitely for sure: The future is digital and there's no going back.