The high-end food and beverage market is, like many industries, struggling amidst a backdrop of reduced demand and economic uncertainty.
For many, the financial impact of Covid-19 has had a devastating effect, and while we all may have a tendency to drown our sorrows from time to time, we are unlikely to do so with a four-figure bottle of bubbly.
However, one luxury wine broker, French company BTC Wine, is experiencing a boom in sales, having carved out a niche as a retailer which trades the finest wines for cryptocurrency only.
Cryptocurrency has benefited from a perfect storm of market conditions over the past 12 months, experiencing an unprecedented bull run as a result of fears of quantitative easing in fiat currencies, an increase in casual investing through services like www.bitreviews.com, and a four-yearly ‘halving’ – which has traditionally sparked a surge in demand.
Halving, for those unfamiliar with the way that the world’s leading cryptocurrency operates, is an orchestrated event in which the new supply of Bitcoin into the market is reduced by 50 per cent, traditionally resulting in increased demand, and a spike in prices.
According to a report published by drinks industry magazine Drinks International, it was during the halving of 2017 that BTC Wine was established by Lasserre and Papillon, a partnership brokerage based in the fabled wine country of Chartrons, Bordeaux, with the mission of trading some of the world’s most exquisite wines in exchange for Bitcoin, Ethereum, or Bitcoin Cash.
Of course, in hindsight, this certainly looks to have been an inspired decision, with Bitcoin, in particular, having grown exponentially in value since then. But it has not been without its ups and downs, and BTC Wine is reaping the rewards of holding its nerve as cryptocurrency dipped in value after the 2017 boom.
Having seen the value increase in 2017 from $900 to nearly $20,000, it would have been tempting for BTC Wine to cash in on its success and revert back to the less volatile world of fiat currencies – with prices dropping back to around $8,000 just a few months later, but that same currency is now worth upwards of $40,000, and continues to rise by the day as mainstream adoption of crypto edges closer to reality.
BTC Wine’s sales director Louis de Bonnecaze told Drinks International: “It’s going very well, because of the bull run. We have a new kind of customers. They have a lot of Bitcoin, and they want to spend it. Fine wine is a status symbol. They have bought the cars and the real estate, and then they go directly to the fine wine, so it’s a good market for us.”
According to de Bonnecaze, BTC Wine is bucking the trend of the wine industry at large, which is currently struggling due to a number of external influences.
“The wine market is not doing very well, because we are experiencing Covid, Brexit, the tax in the U.S. For us, cryptocurrency payments has been a way to make some business in this very difficult period.
“The cryptosphere is a fascinating topic. For us it is above all a way to open our fine wine business to new tech wealthy customers. Blockchain technology opens new perspectives regarding traceability and logistics. We are thinking about exploring these perspectives.”
BTC Wine, whose name is a play on words of the currency code for Bitcoin (BTC), but also stands for Business-to-consumer and ‘by the case’, boasts an array of high-end and exclusive wines in its online store, with current best-sellers including Louis Roederer Cristal 2009, Latour 2005 and Pavie 2006.
de Bonnecaze admits that the company’s trading cycle tends to ebb and flow in tandem with cryptocurrency market variations, and that a dip in value may be on the horizon. He maintains, however, that just as it did after a bear run in 2018, crypto will continue to rise in adoption, and value, in the long-term.
The brand, which recently launched a limited-edition six-wine case called Bitcoin la cuvee, containing Margaux or Saint-Emilion Grand Cru wines, uses BitPay for transactions – and de Bonnecaze hopes that, one day, the company can also pay its wine suppliers in crypto.
While BTC Wine has clearly succeeded from catering to a specific, but growing, crypto-rich wine connoisseur, the company is hopeful that more competition in the coming years will enhance the prospects of their industry.
de Bonnecaze said: “If we have a lot of competitors it will help the market grow bigger. We would like Bitcoin to be a money, and if it is to be a money, it needs to be exchanged, which is why I am welcoming other people to do the same, even our competitors.
“We need all the actors in our business and other businesses to use it. We need mass adoption.”