Crypto Not Just a Fad [In The News]

With certain parties dismissing crypto as a fad, evidence from Denison Yachting suggests otherwise…

This article was featured on Superyacht News in September 2021 and was written by Rory Jackson

At the risk of sounding like a broken record, the word ‘conservatism’ is still one that follows the superyacht industry around, whether that be because of the perceived lack of diversity in design, the sluggish pace at which the environmental agenda was adopted or, more recently, the dismissal of cryptocurrency transactions as being a fad or an interesting piece of marketing material. Evidence from Monaco Yacht Show 2021 suggests that transacting in cryptocurrency is likely to become increasingly commonplace within the superyacht industry.

When the SuperyachtNews (SYN) video content from MYS 2021 is edited and published, many of those who watch the content may catch a portion of the video wherein the SYN editorial team bemoans the press conference cycle that pervades boat shows due to it offering little by way of current or interesting news and serving mostly to allow journalists to rest their feet during what is, for all involved, a tiring week.

We should perhaps though have added more of a caveat. Not all press events are entirely predictable. Take, for example, the Denison Yachting press event that took place on board 46.7m ASYA.

In an informal 15-minute presentation the traditionally US-centric full-service brokerage house informed gathered journalists about its European expansion, its brokerage performance with 75 24m-plus transactions in 2021 to date and a number of genuinely interesting market insights, not least the fact that it has completed 18 crypto transactions.

“We spend a lot of time engaging with clients across various social media platforms, including Facebook and Instagram. Not only have we found it fun and interesting, but we’ve been transacting through those platforms for the last five years,” explained Bob Denison, president of Denison Yachting. “The other thing that I believe is a little unique and different is that we have completed our 18th transaction using cryptocurrency. We have transacted a handful of charters and around a dozen sales, including two with values over $10million. I find that this reflects who we are as a company and brand, we’re forward-thinking. We like engaging with new technologies and platforms, like cryptocurrency, not only because we think it is the future, but because it makes the lives of our clients much easier.”

As with so many inevitable developments, whether they become disruptive in the truest economic sense of the word or not (i.e take over 50 per cent of the market), the industry is split by those who are happier to stick to the status quo and to dismiss technologies that they don’t fully understand out of hand, and those that are willing to embrace new technologies and developments as a means of creating the variety and choice necessary to attract different kinds of buyers.

In recent years there have been various announcements about individual clients being willing to transact in cryptocurrency, but Denison Yachting seems to be the first brokerage house that has done it with any semblance of regularity. Indeed, on the day before MYS started, Camper & Nicholsons and Edmiston announced that 72m Azteca would be accepting full sales payment in Bitcoin only. The comparison between Denison and businesses like C&N and Edmiston is not supposed to be disparaging, it is merely intended to highlight the speed at which Denison was willing to adapt to new challenges. It certainly seems that most brokerage houses are now actively working on how to add cryptocurrency transactions to their business models.

“We accept most of the major cryptocurrencies and when I say major I include Bitcoin, Bitcoin Cash, Ethereum and, more recently, Dogecoin. Although having said that, so far our transactions have exclusively been in Bitcoin,” continued Denison. “We find that Bitcoin, for some reason, is the cryptocurrency that our clients have been happy to use.

“The clients using cryptocurrency are younger and one of the challenges is that we are operating within a very traditional world, not only here (Monaco), but also in the US. Most owners don’t want to accept Bitcoin. So, part of what we do is make the transactions safe and easy for them. We handle all of the conversion so that they can get their proceeds from the crypto sale or charter in US dollars or Euros. Most clients, while they might have an appreciation for Bitcoin, don’t have an interest in taking $15 million of Bitcoin. We firmly believe that this is going to continue to be a growing part of our business in the coming years.”

While the way Denison described the transactions is in relatively simple and obvious terms, there is nonetheless a more profound undertone to its simplicity. Clients can transact from cypto into traditional currency. There is a confluence here between traditional transactions and the transactions of the future, a bridge between new entrants to the market and the stalwart owners that have been part of the industry for many, many years, and this bridge between new and old may be part of the solution for attracting ever-larger numbers of new entrants to the superyacht market. The industry must evolve to meet the needs of the client, not sit back and wait for the client to evolve to suit the market.