While most people consider prices in dollars and cents, Alvin Ang thinks in Ethereum (ETH), a cryptocurrency. When the 27-year-old recently looked for a Cartier Juste un Clou bracelet to pair with the Love bracelet his mother gave him as a teenager, he found that it cost the equivalent of about two ETH. The self-made entrepreneur decided to treat himself to the trinket.
“The bracelet, which I have wanted for a couple of years, is the only physical thing that I have purchased. I’ve also used earnings from NFTs to grow my new company and pay some of my rent,” says Ang, who began investing in non-fungible tokens (NFTs) last year, which have increased in value by more than tenfold.
His interest in NFTs is the technology behind them and how they can be used for business, for example, through smart contracts. His first and largest investment so far has been in Veefriends and he also has sizeable holdings in Moonbirds.
According to Ang, “It effectively makes use of smart contracts in a way that provides more real- world utility compared to other projects at that time, which I found very interesting.” He was also attracted to the possibility of angel investing through NFTs.
He adds that he also wanted to buy “whatever she wants” for his mother. But he notes with a laugh that his mother, who enjoys painting, has become interested in NFTs because of his success and wanted a digital gift instead of a physical object. “She appreciates the art element of NFTs, so I gave her some of mine that is worth something,” says Ang. His mother has since become very involved in some projects, such as World of Women.
He is only one of many young crypto investors, who are eschewing conventional financial holdings for this brave new world of investments — and cashing in their earnings in the real world.
(Related: Rudy Lim thinks crypto could be the new gold)
Crypto is their first foray into investing
For the next generation, being early adopters of crypto has sometimes been their first foray into the world of investing. For example, Serena Zhang, who works in accounts management in a FAANG company, says crypto was the first thing she bought into about six years ago when she first started investing her money.
“I was interested in the blockchain technology behind crypto and the idea of real, functioning decentralised systems,” she says. In late 2016, she first purchased Bitcoin. After seeing it “double in no time”, she decided to purchase more as it grew.
The 27-year-old also moved into farming on Terra, the practice of staking or lending crypto assets to generate returns.
In addition to paying the fees for her master’s degree in international business with her earnings, she has also sold some assets to kick-start her portfolio in stocks. “It’s ironic that if I hadn’t diversified into stocks, I would have been much better off,” she notes wryly.
Nevertheless, she has allocated some earnings from farming, which she views as passive income, to disposable expenses such as holidays and shopping.
“My farming rewards have allowed me to do more, such as take trips to Europe and Bali. I even bought designer stuff in Paris that I probably would not have bought otherwise. My first pair of Christian Louboutin red bottom shoes were paid for with crypto farming profits,” she says.
More retailers accepting cryptocurrency payments
Retailers are increasingly accepting cryptocurrency payments to cater to this growing market of crypto spenders. Five of Gucci’s stores in New York City, Los Angeles and Las Vegas began accepting digital currencies, including Bitcoin, Ethereum, Litecoin and Dogecoin, in May.
Several merchants in Singapore are also accepting cryptocurrency payments. These include EuroSports Global, which sells Lamborghini and Alfa Romeo cars, luxury watch marketplace Luxehouze and the sneaker and collectible marketplace Novelship.
Novelship, which started accepting payments in Bitcoin, Ethereum and Tether as well as via BinancePay in mid-March, has already clocked some 500 crypto transactions, even without promoting this option.
“We conducted an internal survey a while ago that found an overwhelming number of surveyed customers were very interested in alternative assets, such as cryptocurrency,” says Richard Xia, co-founder and chief executive officer of Novelship. “On further study, we discovered numerous advantages of crypto payments such as lower transaction fees, no fraudulent credit card transactions issues and faster receipt of the funds. Thus, we decided to introduce crypto payments.”
Consumers who transact with crypto seem to be particularly interested in hyped sneakers spotted on celebrities — perhaps for their collectible value. Among the shoes they bought are the Sacai x Nike VaporWaffle ‘Black White’ which was worn by singer Jay Chou and the Nike Dunk Low ‘Black White’ spotted on K-pop group BTS’s RM.
(Related: Luxury brands’ latest obsession? NFTs)
Being prudent with crypto earnings
Still, not everybody spends their crypto earnings all at once. Audrey Lim, 35, a Web 3.0 enthusiast, who co-founded the Hola Mona NFT art project in collaboration with three classically trained fine arts artists, is taking her time, preferring to grow her collection of NFT art for now. She has also applied for a crypto credit card — think of it as a prepaid debit card — to make future purchases easier.
Other people choose to accumulate their crypto holdings as a long-term investment. Shaun Djie, an entrepreneur and watch enthusiast, purchased an Audemars Piguet Royal Oak 15400 in stainless steel in 2015, which he half-funded in Bitcoin, the first and only time he has done so. “It was a milestone that I wanted to commemorate, fortunately with money I made through crypto in the early days,” he says.
In the years since then, he has continued to diversify his wealth in different forms and businesses to secure his financial future, he says.
It is noteworthy that the Monetary Authority of Singapore has issued warnings that crypto trading is highly risky and not suitable for the general public. Market analysts have also advised that the cryptocurrency market is volatile.
This is why SGExplained podcast host and content creator Rovik Jeremiah Robert, 28, is dabbling in crypto but continuing to invest in commodities such as gold and in other financial instruments like ETFs.
“Crypto is just another asset class in a whole fleet of asset classes, and there is still a lot of volatility within the crypto space. I am open to putting more money in crypto, but I would like to see more successful projects first,” he says.
However, some aspects of digital currency appeal to him. He says he is considering transacting with friends in digital currency for convenience when he travels for expenses such as dining out.
“When travelling, it can be difficult to pay friends overseas in their local currency because traditional fintech apps charge a higher fee for the transaction. One idea we’ve discussed is the possibility of paying back my friends in digital currencies like Solana, where the store of value is reasonable.”