Speaker 1: This is Bloomberg Crypto, a daily Bloomberg I Heart podcast,
Speaker 1: And I'm Stacy Marie Ishmael, Managing editor of Crypto for
Speaker 1: Bloomberg News. It's Monday, August twenty nine. Hi. I'm Annerera,
Speaker 1: a senior crypto editor for Bloomberg News. In Today for
Speaker 1: Stacy Marie Ishmael, the frosty winds of crypto winter are
Speaker 1: still blowing, and yet n f t s are still
Speaker 1: bringing the heat for many high end products. Non fungible
Speaker 1: tokens have become super popular with many luxury brands, and
Speaker 1: they remain a powerful draw for some consumers. High end
Speaker 1: retailers Gucci and Tiffany are the latest to jump into
Speaker 1: the fray with new n f T offerings. Caring Scucci
Speaker 1: says it will accept eighte coin as a legal tender,
Speaker 1: and select US stores l V, M, H, S, Tiffany
Speaker 1: and Co also an it's launching what it calls n
Speaker 1: f TIFFs. These are collectible passes that can be redeemed
Speaker 1: by owners of crypto punk n f T s for
Speaker 1: a physical custom pendant. Some two trillion has been wiped
Speaker 1: off of crypto's market cap, and the demand for n
Speaker 1: f t s has slumped in recent months along with
Speaker 1: resell value. So why are these brands so bullish on crypto?
Speaker 1: With me to discuss why luxury brands have embraced n
Speaker 1: f T s are Bloomberg journalists, Emily Nicole, You buy
Speaker 1: one at the top and hope that it holds its
Speaker 1: value over time and you might be able to sell
Speaker 1: it for triple the price. Lace around and Tazz actor
Speaker 1: the building shops, outlets, virtual galleries in the actual metaverse.
Speaker 1: Emily Tazz, thanks for joining me today. Thanks for having us,
Speaker 1: Hey Anna, thanks for having thus. Okay, let's get right
Speaker 1: to it. So when did luxury brands fall in love
Speaker 1: with n f T s. So luxury brands have been
Speaker 1: circling around the n f T space for about a year.
Speaker 1: You know, really is n f T collections themselves started
Speaker 1: to take off and they began to see it's what
Speaker 1: younger generations might be interested in in terms of luxury items,
Speaker 1: because n f T s, if they're successful, aren't cheap.
Speaker 1: A digital artwork a non fungible token and n f
Speaker 1: T the name of the artist is people has sold
Speaker 1: for sixty nine million dollars at Christie's auction House in
Speaker 1: New York. Older generations are more keen on buying the
Speaker 1: things that they know, like watches and cars and clothes
Speaker 1: that younger generations are more open to new product streams,
Speaker 1: and so an n f T might be something that
Speaker 1: they can particularly tap into because they're already at a
Speaker 1: higher price point. Younger generations might be more savvy. They're
Speaker 1: also massive wealth signalers as well, so for the people
Speaker 1: who want to look like they have money, n f
Speaker 1: T s are a really big way to do that.
Speaker 1: So I think obviously many fashion brands are still in
Speaker 1: like a very experimental stage right now, so um Dodging
Speaker 1: Gubano is a very notable brand. They launched their n
Speaker 1: f T doing the fashion event that they hold every year,
Speaker 1: and their n f T s particularly well because I've
Speaker 1: sold for millions and they've also had like a physical
Speaker 1: item also given to the person that's obviously bought the
Speaker 1: n f T. What's going on with with Gucci and Tiffany?
Speaker 1: Why did why did they make the news recently? So
Speaker 1: for Gucci, it was that they wanted to expand the
Speaker 1: number of cryptocurrencies that they accept as a means of
Speaker 1: payment in their stores. At the moment, it's just stores
Speaker 1: in the US, and there's a few there's a few
Speaker 1: cryptocurrencies that are involved. The one that we reported on
Speaker 1: was ape coin, which is a cryptocurrency that is affiliated
Speaker 1: with a popular n f T project called the board
Speaker 1: ape Yok Club. UM. It's not necessarily linked to it,
Speaker 1: so it's not necessarily like a win for one is
Speaker 1: a win for both UM. But in the case of Gucci,
Speaker 1: the way that they accept these cryptocurrencies is quite interesting
Speaker 1: because for a big company like Gucci would be a
Speaker 1: big deal if they were to be taking those cryptocurrencies
Speaker 1: directly onto their balance too, and that would mean you know,
Speaker 1: a lot of tax implications, a lot of accounting implications,
Speaker 1: and the regulatory hurdles for that would just be insane.
Speaker 1: So they do it via third party provider that basically
Speaker 1: gives Gucci the dollars. Once the crypto comes in, it
Speaker 1: gets um converted and then put into the into Gucci's
Speaker 1: bancout as a dollar UM. So whether or not that
Speaker 1: counsels accepting crypto, I guess is up to you. For
Speaker 1: Tiffany as well, it was also another area where it's
Speaker 1: a bit of like, you know, playing both sides. They
Speaker 1: decided to launch an n f T collection for holders
Speaker 1: of the Crypto Punk n f T. So if you
Speaker 1: own a crypto Punk nty, which by the way, it
Speaker 1: isn't to do with tiffany um, you could buy an
Speaker 1: an f tiff which is a Tiffany n f t
Speaker 1: UM and then that would basically be a digital pass
Speaker 1: to then convert that into a physical Tiffany necklace in
Speaker 1: the likeness of your crypto Punk. So again you're buying
Speaker 1: something digital, but really you're getting something physical out of it.
Speaker 1: So who are they going after with this, right because
Speaker 1: you said that they are not going to accept the
Speaker 1: actual coin, and how many people have that coin and
Speaker 1: do want to spend it to buy like bags? Like
Speaker 1: what is the deal here? Is it for a marketing
Speaker 1: like you know, you mentioned younger generations trying to you
Speaker 1: know them, trying to attract them, like, what what's the deal?
Speaker 1: I mean, I'm a little bit on the skeptic side.
Speaker 1: So in my mind, it's always a marketing point. It's
Speaker 1: a it's a it's a way to show that you
Speaker 1: as a brand are keeping up with the times and
Speaker 1: keeping up with you know, what's hip among the young people,
Speaker 1: which is crypto at present um but i'd be interesting
Speaker 1: to see, you know, how many people are really spending
Speaker 1: with crypto. And actually there was a story that Tas
Speaker 1: wrote earlier this year where she went to visit a
Speaker 1: store in London, the Philip Line. Yeah, yeah, and they
Speaker 1: actually accepted what was it like quite a lot and
Speaker 1: there was they started to accepting crypto. So it's like
Speaker 1: a web three crypto concept store opened in like old
Speaker 1: Bond Street. Um, really flashy and yeah, I mean some
Speaker 1: of the sneakers were priced sorry ridicularly surprised. Sorry Philip Blind.
Speaker 1: I'm sure they're worth it, but um, and then they
Speaker 1: had like QR colds, they had like, you know, really
Speaker 1: trendy s type n f T s that they were
Speaker 1: giving away with purchases. And I think that Philip Line
Speaker 1: store is the first in London to accept crypto as well. Um,
Speaker 1: yeah it is, isn't. Yeah, So I'm just looking back
Speaker 1: at the article you wrote then, which was in April,
Speaker 1: um and back then that Philip Pline said that last year,
Speaker 1: payments in crypto accounted for around three percent of its
Speaker 1: roughly one hundred million euros and online revenue, which isn't
Speaker 1: a large amount, but it's also not nothing and so
Speaker 1: there's a I guess that arguments that we had for
Speaker 1: some of these companies. This obviously was online revenue compared
Speaker 1: to instore revenue. And how many of us are being
Speaker 1: like trying to spend crypto in a physical way when
Speaker 1: you enter a store as another matter. But it's definitely
Speaker 1: also a revenue stream that brands don't want to ignore.
Speaker 1: So obviously this isn't happening in a void, right, Like
Speaker 1: there's a market around n f T s and there's
Speaker 1: a market around crypto, So so what's happening there? And
Speaker 1: how do the Gucci and Tiffany lot drops as people say,
Speaker 1: in the sector fall within that? Emily, do you want
Speaker 1: to give us a sense At the moment, particularly this year,
Speaker 1: we've seen a bit of a slump in demand for
Speaker 1: n f T s, a lot of the performance of
Speaker 1: even some of the top n f T collections sometimes
Speaker 1: we call them blue chip collections, like crypto punks, like
Speaker 1: board apes, um, those have been falling. Four prices are
Speaker 1: lower than they used to be, and there's even just
Speaker 1: little demand for things once they've already been minted. The
Speaker 1: secondary sales market isn't doing that well. I think our
Speaker 1: colleague Olga Cry for a really great story earlier this
Speaker 1: year that said that, you know, one in three n
Speaker 1: f t s has little to no secondary trading after
Speaker 1: it's been born. Once red hot, n f t s
Speaker 1: are now cooling off a bit. The secondary market for
Speaker 1: the majority of people's paintings today is down from the peak,
Speaker 1: as is most an ft art. So kind of shows
Speaker 1: that n f t s are performing in line with
Speaker 1: the same way the rest of crypto is. At the minute.
Speaker 1: Nothing is really you know, booming. Nothing's going to the
Speaker 1: moon in general. It's pretty much just subdued slump. I
Speaker 1: guess it's how you could put it. And so when
Speaker 1: these brands have come in, we expected to see a
Speaker 1: bit of a bounce, and I guess we did see
Speaker 1: a little bit of a of an uptick and some
Speaker 1: of the floor prices of these n f t s,
Speaker 1: you know, on the day of the announcements, but those
Speaker 1: bounces haven't really held since then. We'll be right back
Speaker 1: with more from Bloomberg reporters Emily Nicole and taz Aktar
Speaker 1: on how big brands are getting into the cryptosphere. So
Speaker 1: I'm curious to hear your thoughts on this. I've been
Speaker 1: hearing that you know, in a sense, the n f
Speaker 1: T world is a bit disconnected from the broader like
Speaker 1: crypto markets in the sense of crypto prices of bitcoin.
Speaker 1: Do you think that in a way, you know, it's
Speaker 1: become its parallel thing because it's more connected to reality
Speaker 1: because we have these brands and these companies coming in,
Speaker 1: or do you see it as always intertwined in that
Speaker 1: you know, if one goes badly, the other one will
Speaker 1: go badly too. If we look at this purely from
Speaker 1: a market's perspective, crypto has been very volatile over the
Speaker 1: last year, as it as it always has been. We
Speaker 1: haven't really seen that improving en T s haven't been
Speaker 1: as volatile, and so in that way, they're not really
Speaker 1: a parallel because they do operate slightly different. It is
Speaker 1: more of a kind of store of value in a sense,
Speaker 1: because you buy one at the top and hope that
Speaker 1: it holds its value over time and you might be
Speaker 1: able to sell it for triple the price later on,
Speaker 1: compared to crypto, where people are you know, making quick
Speaker 1: arbitrage trades and trying to make money off the pennies,
Speaker 1: and difference between prices on different exchanges um but that's
Speaker 1: not to say that they don't also get affected by
Speaker 1: the same things. You know, if you were a crypto
Speaker 1: trader and you were seeing losses elsewhere in your portfolio,
Speaker 1: you might sell an enterty to make some money back,
Speaker 1: and vice versa if you if your n f T
Speaker 1: s were crashing, which to be honest, doesn't happen very often.
Speaker 1: We don't see crashes that often in floor prices. What
Speaker 1: did we learn about Gucci while we were reporting this
Speaker 1: Emily and that that's also connected to n f t s,
Speaker 1: but not necessarily just n f T s. So when
Speaker 1: we were looking into this story, we were kind of
Speaker 1: trying to position how these most recent drops in enterty
Speaker 1: collections or accepting more crypto payments is situated within their
Speaker 1: broader push into web three UM, and for Gucci, it's
Speaker 1: something they've been working on for a while. Speaking to
Speaker 1: a representative at Gucci, we learned that, you know, this
Speaker 1: is part of a push they've been doing for about
Speaker 1: a year and a half and they have this new
Speaker 1: unit within the business um that they hope to become
Speaker 1: a little bit like a startup that is more free
Speaker 1: to do what it wants within crypto and web three
Speaker 1: without the constraints of the big parent behind Gucci carrying,
Speaker 1: you know, tapping over its shoulder. And one of those
Speaker 1: things is to hire a head of Web three, like
Speaker 1: a global manager that can oversee the operation stions and
Speaker 1: push the brand forward in this digital space. But they
Speaker 1: advertise for that role in January and it's still accepting
Speaker 1: applications in August um, so you know how successful that
Speaker 1: push has been is a matter of a guest looking
Speaker 1: at whether or not this drop takes off, will find
Speaker 1: out in results whether or not, how like how much
Speaker 1: they accept every quarter and crypto payments, and if they
Speaker 1: ever fill this role, you know what that person's strategy
Speaker 1: will be and what their goals will be, because that
Speaker 1: would be quite interesting to see how that how they
Speaker 1: plan to take the Gucci brand forward in a digital world.
Speaker 1: They've also bought like a plot of digital land in
Speaker 1: the sandbox as well, is a gaming virtual world built
Speaker 1: on the Ethereal block chain where players can build on
Speaker 1: and monetize their gaming experiences using non stopes and crissies
Speaker 1: of experimenting with similar as well. They're building shops, outlets,
Speaker 1: virtual galleries in the actual metaverse, right, so everything is yeah,
Speaker 1: virtual alright, so we do have to go back to
Speaker 1: the real world, in our real desks to do some
Speaker 1: you know, reporting of the world that's not in the
Speaker 1: metaverse for now, so amazing. Thank you both for joining me.
Speaker 1: You can find more of Emily and taz is reporting
Speaker 1: on the Bloomberg terminal on Bloomberg dot com and on
Speaker 1: Twitter at Emily J. Nicole and at Tanzil Underscore Actor.
Speaker 1: On the next episode of Bloomberg Crypto. Even if you
Speaker 1: haven't ever heard the phrase the merge before, you should
Speaker 1: know that it's one of the most important upcoming developments
Speaker 1: in the world of crypto. We'll tackle this long awaited
Speaker 1: software upgrade to the Ethereum blockchain and what might happen next.
Speaker 1: This is Bloomberg Crypto, a daily podcast from Bloomberg and
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Speaker 1: or suggestions for the show to Crypto at Bloomberg dot
Speaker 1: net or find us on Twitter. We're at Crypto. The
Speaker 1: supervising producer Bloomberg Crypto is Vicky very Galina. Our senior
Speaker 1: producer is Janet Babin. Our producer is Mohammed Farup, Associate
Speaker 1: producer is Mosses and Um Desta wonder At is our engineer.
Speaker 1: Original music by Leo Sidrin. I'm Stacy Marie Schmal We'll
Speaker 1: be back tomorrow.