Yachting through the crypto Winter
If you don’t own Crypto you may have missed the travails of FTX, a large exchange, which suffered the equivalent of a run on a bank this week.
After $6bn of panicked withdrawals in three days, it agreed on a bailout deal with Binance, a large competitor. This is more ammunition for crypto-sceptics. But fans are confident that the sector will bounce back from this “Crypto Winter”. And that more crypto superyacht deals will continue to close.
“It is a crazy time to be looking at cryptocurrency,” Richard Iamunno, CEO of digital asset group Atlantic International Capital tells Superyacht Investor (SYI). “The crash has affected all the markets, but it will bounce back. It always does.” Atlantic International Capital sees yachting as a key growth market for its digital assets group.
Bitcoin is down 9.84% in the last 24 hours with Ethereum down 16.09%. But a lot of people have made a lot on the way up. Forbes says 19 people have become billionaires from cryptocurrency alone.
“A lot of people have crypto and they’re spending it,” says Iamunno. “Tuesday (November 8th) was a horrible day in the market. By Friday, it will be like they forgot about it. That is just the way it goes – up and down.”
Iamunno says he typically sees men aged between 18 and 30 wanting to use crypto to buy high value assets.
“We have had young clients looking to buy $50m superyachts, without even owning a house as an asset,” Jonny Dodge, CEO and founder of crypto-based brokerage My Ocean, tells SYI. “We have also chartered the Flying Fox to a client using cryptocurrency for over a month. That was around $3.5m a week, not including all the taxes.”
Other brokers are also open to crypto customers. Brokerage YACHTZOO partnered with cryptocurrency payment platform BitPay in order to accept payments using cryptocurrency. Bitpay would then hold the fees in a digital wallet, or exchange the sum into a currency of the sellers choosing.
Pelorus, Borrow A Boat and Denison Yachts have all been using cryptocurrency for some time. Many have cited not only the demand for people using crypto but the utility of the currency itself.
“One of the biggest problems you get in the industry is that quite often, you need immediate payment to a charter operator,” says Dodge. “With bank transfers, this can take days. But if you can pay them in crypto, the money’s there quicker than any other way of doing it.”
Iamunno says you should look beyond the different currencies.
“I think we overcomplicate this thing when you look at all the various tenders. What you are basically doing is just accepting another credit card. Another form of payment,” says Iamunno. “ Of course, it can go up and down, but there are stable coins available that mitigate this too.”
Dodge agrees. “The old guard is going to keep the things to create the stability of the industry. And I certainly won’t knock that. But I think that technology has to drive things forward,” he says.
Cryptocurrency isn’t without its critics, and after this week’s events, it will likely have more but Iamunno and Dodge are confident it will stay in yachting.
“It’s new and it’s growing,” says Iamunno. “I was in the Dot.com era and everybody belittled that at the time. Now, it’s mainstream. It’s the same thing here. It’s just 20 years difference.”