A young man in a suit walks past a store on 5th Avenue.
Andrew Lichtenstein/Corbis is pictured.
The rise in the price of cryptocurrencies is helping to cultivate a new group of young American buyers of luxury goods, with their spending on NFT artwork and high-priced apparel set to further propel sales in the luxury market beyond pre-pandemic levels, according to a report.
Chinese consumers are the main force in luxury spending. The investment bank said in a research note that the US has experienced strong growth over the last year. The note outlined findings from visits to 48 stores in New York and Florida where high-end brands including Louis Vuitton and Gucci are owned by Kering.
The impact of so-called 'pent-up demand' is only one part of the story, as we flag the significant surge in asset values from stock market to real estate to contemporary art.
They said conversations with store managers and assistants show that young people cashing in on the gains of cryptocurrencies to buy expensive jewelry, apparel, and accessories.
The analysts said that 20%- 25% of last year's sales may have been generated by this phenomenon.
More institutional and retail investors have pushed money into digital assets as the market has swelled beyond a $3 trillion valuation for the first time. Through the first half of the year, the price of the digital currency has increased by 62%. The market cap of the market has fallen to $2.3 trillion.
It said that the channel checks were conducted at the same time as the Art Basel international art fair in Miami and a number of important cripto-trading events.
The firm said that US luxury spending in fiscal year 2021, which began in July, has returned to levels seen before the coronaviruses. Spending on such things could be 45% more in the next fiscal year.
It said that this is dependent on the resilience of the underlying assets which allow monetisation and is therefore implicitly volatile but is at least not subject to the risk of growing government pressure as is the case in China.
It was recommended that investors buy shares of Kering, Mytheresa, and Watches of Switzerland.
Business Insider has an original article.
