Investing in Bitcoin or a Hermès Bag?

It is finally time to make some decisions about where to invest your hard-earned money.

Which asset is a better investment? Which is the more optimal store of value? How likely is each to rise in value? Why is it important to compare a luxury bag with a blockchain asset?

When you buy a luxury fashion handbag — let’s take the Hermès Birkin as an example — you are buying more than a bag. You’re buying the firstly the name. You are buying the brand and the signature look associated with that model. You are buying a piece of the brand, a physical manifestation of societal value and utilitarian aesthetics. Your bag is an asset tied to the world of fashion and high culture, representing the standard by which other bags are judged. You now own an authentic product which can be resold in secondary markets, and because of the blockchain, your asset can viably be used in the metaverse.

The Hermès Birkin is a cornerstone of luxury production, a globally-recognized image which carries value across borders. It is a key piece in a cultural puzzle which has yet to be fully defined — that is, the bag itself contains a verifiable market value, however the social significance is something that is more difficult to model accurately. It is the real and perceived social value which truly makes a Birkin a worthwhile investment, as there is no single entity controlling its eventual price. It is this new connection to rapidly-evolving global blockchain ecosystems which makes a luxury handbag even more worthy of consideration for investment, as the digitalization of luxury goods is in increasing and non-fungible tokens (NFTs) now support the authentication of ownership and continued (accurate) valuation for limited edition products like the Birkin.

Luxury brands are beginning to accept cryptocurrencies en mass, and decentralized finance (DeFi) is opening doors for buyers to collateralize their assets in various ways; known as asset-backed NFTs, these digital twins are giving buyers an advantage which cannot be replicated, as their prized possessions are backed up by the immutable blockchain ledger, and therefore can be verified (and resold) instantly with no intermediary.

So the question now becomes: should I buy a Birkin bag, or should I buy Bitcoin instead? The two are obviously not mutually exclusive, however they are similar in many ways, and our goal — to understand the differences between the two assets — is worthwhile, as it allows us to have better information in deciding what kind of asset-class we wish to handle, how much exposure we wish to have, and where the market is going.

There is much to be understood about Bitcoin, particularly as an asset that can now be easily bought and sold and which has continued to rise in value (every 2 years). It is by-far the most-talked-about and debated asset in the world today, one which many call the “most advanced store of value in the history of our species”.

Indeed, Bitcoin harnesses blockchain technology and has shown (the world) just how powerful blockchain networks can be in enabling us to transact freely. Bitcoin portends the truly free markets which authors have postulated about and expounded upon for millennia; it presents grand opportunities for trade and novel ways to engage in exchange. It is (at once) a store of value and a bartering piece, arguably a superior means of exchange compared with anything else.

You can now buy practically anything with Bitcoin, and soon Bitcoin could become the world’s reserve currency, as traditional fiat is subject to inflation and government interventions beyond one’s control.

The ability to borrow against one’s Bitcoin is now easier than ever, and as a technological invention, Bitcoin stands to be the marker by which all other assets will be judged going forward.

As to the question then of whether one should choose to buy Bitcoin or choose to buy a Birkin bag — well, that is a personal choice that deserves careful thought and research, considering the manifold ways which one can use either asset in today’s web3.0 landscape. Both assets have the (proven) capacity to rise in value, and both assets represent much more than a name or title.

Together, both Bitcoin and Birkin represent a new type of asset-class which is now being traded in newly-designed marketplaces, merging the physical and digital, and harnessing energy in newfound ways, allowing individuals to decide — at any given moment — what a worthwhile investment looks like to them.

These assets have created a new form of freedom, in the sense that the freedom to choose is grounded in the knowledge that these items do in fact “belong” to them, and what belongs to you is assuredly your property, digitally and physically.

It is now time to choose; Bitcoin or Birkin?

About LuxFi

LuxFi is the world’s first asset-backed NFT marketplace for luxury assets, where people can buy, sell and invest in luxury assets using cryptocurrencies and traditional payments. We eliminate counterfeiting while minting an NFT on a multi-chain blockchain network, with a focus on luxury assets that hold value well and have a high resale value. Leveraging our big data intelligence system and unique algorithm for automated data collecting and data processing, the value of each NFT on our platform is backed by real-world data.

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