Here’s why crypto investors are dumping their fancy cars
Too often, when you scroll through your social media feed during a lunch break, you wonder how teenagers or young adults showcasing their opulent lifestyle on Instagram or TikTok have amassed such incredible wealth in such a short time. Most of these young people do not have “traditional” jobs. Instead, they work as influencers, key opinion leaders, or cryptocurrency investors. They also use lingo that most people find almost alien, and they lead lives that are totally different from your worn-out, almost exhausted lifestyle. To make matters worse, they wear the best designer outfits, vacation in the fanciest places and drive the most amazing luxury cars. The New York Times brilliantly described the phenomenon by saying:everyone is getting hilariously rich, and you’re not.”
Meanwhile, already in 2018, CNBC reported that crypto-millionaires preferred Lamborghini cars. This was even reinforced by The New York Timeswho added that the crypto community sees Lambos as “the only acceptable way to spend money in the Ethereum cryptocurrency community.”
However, a lot has changed since 2018. The world has not only overcome the Covid-19 pandemicRussia went to war against Ukraine, and global supply chains have seen disruptions, but the cryptocurrency has also suffered a catastrophic collapse. FTX and FTX.US, two cryptocurrency exchanges, filed for bankruptcy last month. Meanwhile, the cryptocurrency market as a whole has seen a sharp drop in value. Naturally, the “crypto winter” had a significant impact on investors, so it’s no surprise that they had to offload their expensive sports cars.
This is why crypto investors are selling their luxury cars
the New York Post reports that the kings of crypto are “offload their fancy cars amid the fallout from the FTX implosion.” The digital publication also points out that sellers have posted various luxury vehicles like the Mercedes-Benz G-Wagon on resale sites, such as Auto Trader. However, these vehicles don’t seem to be getting the same attention from the gearing community as they once did. Some of the vehicles that are coming to market are Lamborghini Urus and McLaren Spidersconsidered “the new unofficial badge of the crypto-rich”, according to the New York Post.
Some industry insiders seem to agree with the New York Postof the assessment that the collapse of FTX has seriously impacted the luxury car sector.
“The exotic car market is decimated right now,” CarDealerGuy tweeted November 22, before adding that the owners sold a 2021 Mercedes G-Wagon with just 3,378 miles on the odometer for $187,000 at auction. “That’s a drop of almost $80,000 (or 30%) in less than 12 months,” he said.
“Clearly over the past couple of months, the price decline for exotic vehicles has accelerated and that aligns very, very well with the collapse of the crypto markets where we know some of the biggest customers of exotic vehicles were crypto millionaires,” CarDealerGuy added.
Software engineer Brianna Wu also thinks the FTX disaster hurt the exotic car market.
“The crypto crash is real. At present, AutoStorm blows up with McLarens – Cryptobros’ flashy and wildly unreliable car that couldn’t change a tire if their lives depended on it,” she wrote.
Vehicles associated with crypto-millionaires have suffered the most
Undoubtedly, not all Exotic vehicles felt the impact of the FTX collapse in the same way. In fact, the cars that suffered the most were those associated with the new wealthy class and the so-called “kings of crypto.” Lamborghini, in particular, played a risky game when it allowed an association with teenagers and young adults who earned money quickly and without too much effort. Their permissive strategy diluted the brand and tied them to fresh money. And let’s face it, no respectable person in the legitimately wealthy elite wants an association with the New Rich. However, given Lamborghini’s long-standing connection to new money, some experts say the harm isn’t as bad as it first appears.
“Historically, Lamborghinis have always represented fresh money”, red woodpecker CEO Susan Cantor said Digiday. “It’s a symbol of excessive and unreasonable wealth because no one needs a Lamborghini.” Nevertheless, Cantor argues that Lamborghini could face reputational risks in the future. “When brands are specifically associated with individuals because of their socio-economic status, there is a risk of that. Lamborghini should stick to its promise or its essence, which is about performance,” added Cantor.
Of course, Lamborghini isn’t the only maker of exotic vehicles whose reputation could be tarnished. Due to its affiliation with crypto-millionaires, Mercedes-Benz can also scare its base and scare away traditional customers.
Sources: CNBC, The New York Times, Digiday, Twitter, CBC, New York Post.
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