Crypto Luxury Transactions Accelerate at Sotheby’s

Crypto’s mainstream adoption has gained further momentum as the 277-year-old British auction house Sotheby’s sold a rare 101.38-carat diamond for $12.3 million in cryptocurrency to an anonymous buyer.

The pear-shaped second-largest diamond appeared on the public market as the most expensive gemstone ever bought with cryptocurrency. While the auction house didn’t mention the cryptocurrency used for the purchase, Sotheby’s previously expressed its intention to accept Bitcoin and Ethereum for the diamond dubbed “The Key 10138.”

Wenhao Yu, Sotheby’s deputy chairman for jewelry in Asia, said in a press statement that cryptocurrency as a payment method has attracted a digitally savvy generation.

“This is a truly symbolic moment,” Yu said. “The most ancient and emblematic denominator of value can now, for the first time, be purchased using humanity’s newest universal currency.”

“Never was there a better moment to bring a world-class diamond such as this to the market,” Yu added.

Southby’s adoption of cryptocurrency for other products

This is not the first time Sotheby’s adopted cryptocurrency as a valid payment method.

In April, the auction house started appealing to both crypto enthusiasts and traditional art collectors with a sale of digital art in the form of non-fungible tokens (NFTs).

The NFT boom has helped digital creators using blockchain sell their work online for thousands of dollars. NFTs are tied to assets that can be traded, bought and sold, and they enable the artists to profit from their unique art more easily.

In May, the auction house permitted bidders to pay via Bitcoin or Ethereum for Banksy’s “Love is in The Air.” The artwork portrays a man wearing a mask while throwing a bouquet of flowers.

Sotheby’s entrance into the crypto world is supported through a partnership with one of the largest cryptocurrency exchanges Coinbase, which was valued at around $86 billion in April.

Wider crypto adoption is gaining momentum

Concerns over rising inflation, a depleting U.S. dollar value, and near zero interest rate policy are some of the reasons why investors are becoming more interested in cryptocurrency.

Corporations and institutional investors have also been increasing their interest in the crypto markets, adding to the overall growth. In addition, fintech giants like PayPal and Square have been entering the crypto markets, with an aim of enhancing retail investors’ access. Major banking giants, which were among the biggest critics of digital currencies, have also started offering crypto services amid increasing pressure from clients.

What’s more, companies involved in crypto-related products and services saw a whopping growth in revenues. Visa, the payment technology company, revealed that crypto-linked card transactions exceeded $1 billion during the first half of 2020, hinting at enormous adoption of digital currencies.

While the first real estate transaction using cryptocurrency happened in 2014, the trend has recently escalated in the U.S. The largest-known cryptocurrency deal in American history occurred in Miami in June when the city’s most expensive penthouse sold at around $22.5 million in cryptocurrency.

A Beverly Hills mega mansion at 1108 Wallace Ridge in the exclusive Trousdale Estates neighborhood was also advertised for sale against $65 million—or the equivalent in Bitcoin.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.