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Yachtings crypto dream gets put on hold

The crypto market has been rocked once again, and it seems yachting may stick to traditional transactions for now…

Over the course of the year, I have interviewed numerous CEOs who have told me, through gritted teeth, that cryptocurrency still has a place in the superyacht industry. The argument is always the same - it might be down now, but just you wait, crypto is inevitable! That might be true, and I understand the sentiment, but every time the crypto market demonstrates its volatility, the sceptics and traditionalists of the yachting industry are rewarded for their hesitancy.

Even the most prominent crypto champions are now expressing concern about the feasibility of currencies like Bitcoin and Ethereum ever becoming mainstream. Earlier this week FTX, one of the largest exchange companies in the world practically imploded after Binance, a larger rival business, pulled out of a deal to buy and rescue the company. Customers fled the exchange after becoming concerned about whether or not FTX had enough capital, and the company is now left scrambling for survival after having its assets frozen by regulators in The Bahamas.

This has ultimately created a shock to the market, and on Thursday, Bitcoin fell below $16,000 (£14,049) for the first time since 2020. Sam Bankman-Fried, the 30-year-old billionaire and Founder of FTX, lost 94% per cent of his wealth in a single day. His case is an extreme example, but it does look like it is going to be a lean, long winter for the crypto community considering the remarkable plunge in prices, coupled with a worrying rise in digital scams that have left many with devastating losses and in many cases debt.

So what does this mean for the yacht market? Well, for a long time now some stakeholders have taken to social media to berate the rest of the industry for being too old-fashioned and not tapping into newer younger markets. I for one have written about this extensively over the last twelve months. But it does now seem like the sceptics could have been right, after all, there is evidence to suggest that the crypto community and the superyacht industry are not entirely compatible in the current climate

Jonny Dodge, the CEO of My Ocean Ltd, a company that accepts crypto payments for all of their services, including concierge, management, and charter, admitted that the current state of the market is not ‘ideal’. Dodge explained, “Does it slow down the spending? Yeah, absolutely. But does affect crypto’s potential and utility within the marketplace? Absolutely not. I think that we'll see far more people using crypto and tokens in the luxury sector.”

Moreover, at The Fort Lauderdale International Boat Show this year, the founder and president of Denison Yachting, Bob Denison, revealed that the firm has now completed 14 transactions using cryptocurrency, including four over the value of $10 million. So, perhaps we shouldn’t be too quick to discount the idea of wealthy people using crypto to buy luxury assets.

In August, Bloomberg reported that around 18% of Billionaires had at least 1% of their fortune in cryptocurrencies, whether or not they were actively using the currencies, is a different question, but it has been revealed that there are now 18 identified crypto billionaires in the world, and at least 16 of them have United States passports. CNBC’s ‘Millionaire Survey’ which was published in December 2021, reported that 83% of millennial millionaires own cryptocurrencies and that more than half (53%) of them said they have at least 50% of their wealth in crypto. 

It makes sense for the superyacht industry to try and tap into this market, and perhaps the real value of providing crypto as an option is to show clients that you are a dynamic and accommodating business. But with that being said, the idea of true transactional freedom in a democratic financial system is still a dream that will most likely take years to become normalised in a space as old-fashioned and conservative as the superyacht industry. It’s not to say that the industry should forget about crypto, but it should treat it with caution, at least for now.

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Yachtings crypto dream gets put on hold

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