Cryptocurrency for Luxury Watch Sales: Market Trends

elliot55 · 2021-03-01T10:59:15Z

Explore the WatchProSite community's debate on using cryptocurrency for luxury watch sales. Elliot55's 2021 post sparks discussion on tax avoidance, risks, and the future of payments.

elliot55

WPS member · Horological Meandering forum

31 replies3273 views4 photos

In a forward-thinking 2021 post, elliot55 ignited a discussion on the potential for cryptocurrency to revolutionize luxury watch transactions, particularly within the secondary market. He provocatively questioned traditional payment methods, suggesting that digital currencies could streamline purchases and potentially mitigate the burden of taxes and customs fees. This article distills the community's diverse reactions, exploring the feasibility, risks, and regulatory challenges of integrating crypto into watch sales.

31 collectors discussing this on the WatchProSite forumJoin the Conversation →

... We all love watches. That’s why we’re here. Many of us have one watch. Most of us have several. And a few of us have massive collections. With that in mind, we’re always looking for that next piece.

Many of us don’t know which one it will be. Most of us are on some kind of hunt. And a few of us are just waiting for that Omega 50^th Anniversary Silver Snoopy or Rolex Daytona to be delivered. Whatever the case, there’s a whole lotta’ money moving around. And a whole lotta’ taxes. And a whole lotta’ customs fees. That hunt you’ve been on for the perfect twenty-five-hundred-dollar Chronostop could end up costing you more like four grand.

This is particularly true in the secondary marketplace where watch sales are currently outpacing new sales and it is high time vendors started accepting more than just a credit card or wire for payment.

Case in Point: Given its current value, one Bitcoin can buy a Duometre a’Chronograhe in platinum. In most places, this approximately $50,000 transaction would also have another six to ten percent tacked on (as much as $5,000 more bucks for you math majors), and likely some customs charges. Imagine paying for your next watch - new or highly-sought-after vintage timepiece - with Bitcoin. Or more specifically, a “Satoshi”, or smaller portion of a Bitcoin. There would be no tax to charge. No VAT. Just a “trade” type of transaction with the individual buying or selling a watch. It could be just that simple.

Those of us who have bought and sold timepieces over the Internet know there is an art to it. Using eBay, for example, is not only an art, it costs an arm and a leg. Couple that with the transaction being handled by PayPal and you just gave up close to 18.5% of your sale. In the world of equity transactions, where I am trading something I own for something you own and no currency of any kind is exchanged, these types of fees and charges could be significantly offset.

One very interesting point on trading crypto currencies – the crypto market never closes! Personally, I have some Bitcoin and I was lucky enough to listen to one of my close friends and got in relatively cheaply about a year ago. Recently, I have been looking closely at one called Stellar Lumens. All said, the crypto currency market is not like the traditional stock market. It is wildly unpredictable, which also means it can be volatile as all hell. As is the case with any investment and probably stupid of me to say but please do your homework and invest wisely. If Stellar does what I think it will do, that 50^th Anniversary Silver Snoopy could be mine sooner than later. Something to think about.

- Scott

Key Points from the Discussion

The original author proposed that cryptocurrency transactions, framed as 'trades' rather than monetary purchases, could allow watches to be shipped as 'gifts,' potentially circumventing customs duties and taxes on international sales.
While acknowledging the innovative potential, one contributor highlighted the significant risks associated with crypto assets, advising against allocating more than 5% of one's net worth to them, and noted that Bitcoin transactions incur substantial processing fees.
A skeptical view suggested that adopting crypto could lead to speculative bubbles, where artificial demand and inflated prices are driven by continuous trading and promotional content, likening it to the Patek Philippe Nautilus Ref. 5711 phenomenon.
A key question emerged regarding the legal and governmental stance on crypto payments: do governments care about the payment method, or do they primarily focus on the watch's value for taxation purposes, regardless of how it was paid for?
One user pointed out that Stephen Foskett of Grail Watch frequently denominates Bitcoin in watches on social media, indicating a growing informal connection between the two asset classes.
Another contributor argued that the risk of crypto value fluctuation during a transaction is manageable, as conversion to cash can be almost immediate, and stablecoins offer a less volatile alternative for such transactions.
The original author countered concerns about risk by asserting that risk is inherent in everyday life and that 'no risk, no reward' is a fundamental principle for those willing to innovate.
A significant ethical concern was raised regarding the potential for cryptocurrency to facilitate transactions involving funds from criminal enterprises, making its widespread adoption in luxury markets problematic.

The Discussion

amanico

Mar 1, 2021

I would be you, I would jump on the Duometre Coin. ;)

elliot55

Mar 1, 2021

I Hear There Will Be...

... A JLC coin

amanico

Mar 1, 2021

This one will be platinum. ;)

MichaelC

Mar 1, 2021

LOL! No surprise there.

CGJ0

Mar 1, 2021

What I think your post identifies, as with all middle-men arrangements, is that the middle man needs to add value to the transaction (proportionately) for one not to want to circumvent. I think it’s inevitable crypto will be offered on some transactions,

however, I have a personal adversity to this happening as I believe a lot of the funds are coming from criminal enterprise. Not the best worded response but covers off my thoughts!

elliot55

Mar 1, 2021

If We Worried About Funds Coming From Criminal Enterprises...

... I am pretty sure a lot of us would not have watches