Ferrari has announced that it will expand its program to accept cryptocurrency payments for luxury sports cars to its European dealer network starting at the end of this month. This follows an initial launch in the US last year.
By the end of 2024, the Italian automaker plans to further expand this program. This will include other dealerships in its international network, in countries where cryptocurrencies are legally allowed.
The manufacturer, based in Maranello, Italy, explained that the decision is in response to growing demand from Ferrari’s affluent customers. The company reported that these customers are showing increasing interest in using digital currencies for high-end purchases.
Several cryptocurrency industry executives have suggested that the strategy serves primarily as a branding move for Ferrari.
The wealthy are looking for hassle-free payments
Tom Dunleavy, CFA, partner at MV Global, said cryptocurrency payments are becoming more common. He believes the trend starts with luxury items and will eventually spread to more affordable goods, following the typical path of new technologies.
Dunleavy said that when he bought a car in the US a few months ago, he regretted not being able to use USDC in the transaction. Instead, he had to transfer the funds to his bank account, get a certified check from the bank, and then take it to the dealership.
“Removing friction is something the rich want, and cryptocurrencies solve that in many cases,” – he said.
Using cryptocurrencies to attract image-conscious consumers
Consumers often choose products that reflect their identity, values and goals – a concept central to advertising theory.
According to Vijay Pravin Maharajan, CEO of bitsCrunch, Ferrari can use cryptocurrency adoption to connect with a demographic group of affluent, tech-savvy individuals who are adopting cutting-edge financial solutions.
“This move is likely to resonate with consumers who see themselves as pioneers in adopting new trends and technologies, reinforcing their personal identity by being associated with a prestigious brand such as Ferrari,” – he said.
Maharajan said senior executives may be hesitant to adopt cryptocurrency payments until their viability is undeniably clear. However, if Ferrari’s venture proves successful, other luxury car manufacturers may follow suit in the near future.
Changing demographics
Adam Koprucki, founder of RealWorldInvestor.com, noted that traditional Wall Street professionals such as bankers and lawyers are no longer the primary buyers of cars like Ferraris. The rise of cryptocurrency has created a new generation of young millionaires who prioritize convenience and may be more open to Ferrari’s adoption of cryptocurrency payments.
Koprucki suggested that the typical Cadillac buyer may not invest in cryptocurrency. However, in the case of ultra-luxury vehicles such as Ferrari, the target group becomes crucial in determining whether cryptocurrency adoption will be beneficial.
Luxury brands are expected to adopt cryptocurrency to attract younger customers
Erik LaPaglia, Propy’s chief strategy officer, believes that prestigious global brands should take advantage of the potential of digital currencies by incorporating them into their business operations.
“Not only will it raise its profile with a younger and more diverse customer base than it could currently generate, but it will also allow for optionality in the future,” – he said.
LaPaglia suggests that acceptance of cryptocurrencies is just the beginning for Ferrari and other luxury brands, and the logical next step in the development of their business.
“They need to meet their customers where they are. And since these brands want to reach a younger audience, I imagine that a large percentage of their potential customers have asked about paying in digital currency,” – he said.
