Ferrari begins accepting cryptocurrencies as payment for its cars

Ferrari customers in the US can now buy new cars like the Purosangue crossover using Bitcoin and Ether. David Paul Morris – Bloomberg/Getty Images

Ferrari is one of the most recognizable brands in the world, which means it can pick and choose which customers knocking on its doors will get the keys to the next luxury sports car proudly bearing its signature dancing horse on the grille.

So news from its Maranello headquarters that the Italian manufacturer is now accepting cryptocurrencies as payment for its cars makes this announcement even more bizarre — not even Elon Musk’s Tesla offers that option.

“This will help us connect with people who are not necessarily our customers but might buy a Ferrari,” Enrico Galliera, the company’s head of sales, told Reuters in an interview published on Saturday.

In order to avoid exposure to volatile fluctuations in the prices of Bitcoin (BTC) and Ethereum (ETH) – two of the three currencies it will accept alongside Circle’s USDC stablecoin – it will offload the risk to BitPay, a major provider of cryptocurrency payment services.

In this way, Ferrari avoids having to hold tokens on its balance sheet, exposing its investors to crypto market risks such as those caused by the collapse of Terra/Luna, Celsius, 3AC, and most importantly FTX last year.

“This was one of our main goals: to avoid direct dealings with our merchants and us, and to protect against its wide fluctuations,” Galiera told the news agency.

Given the anonymity that digital wallets provide – increasing their appeal to the more shadowy elements of society – BitPay will ensure that payments will not be illicitly acquired funds, or laundered for the purposes of organized crime or tax evasion.

Galliera said the decision, which came as a result of merchant and customer requests, would be limited to the US market initially, but it plans to add Europe early next year.

Best known for its mid-engine V12 supercars like the Enzo and LaFerrari, the company recently launched the first four-door model in the brand’s 84-year history, the Purosangue crossover.

This move away from its strict devotion to coupes, previously considered unthinkable, enables it to lure customers away from the Lamborghini Urus, Aston Martin DBX and Bentley Bentayga.

The fast-growing luxury crossover segment is very popular in China, where demand for the type of two-door luxury sports cars, in which Ferrari specializes, is lower than in other regions, such as the United States.

luck She contacted Ferrari for more details about its cryptocurrency payment plans, but was unable to reach a representative.

Tesla has abandoned its brief foray into crypto car sales

Tesla briefly tried in early 2021 to accept payments for its cars in Bitcoin, after purchasing $1.5 billion worth of the digital currency, but the effort only lasted a few weeks. Subsequently, CEO Elon Musk withdrew the offer, according to Three exhibits (including one of luck) which reveals the massive amount of energy the Bitcoin blockchain consumes to run the computing-heavy consensus mechanism known as proof of work.

Musk suffered several large impairment charges on the value of Tesla’s Bitcoin stake before liquidating the bulk of its remaining holdings last year. At the time, he sought to placate crypto enthusiasts by claiming that it was not a vote against the technology, but due to concerns he had about the company’s “overall liquidity.”

Since then, Musk has only allowed a few select Tesla-branded items in his commerce store to be sold for Dogecoin, despite being known for his support of the technology and numerous requests from his community to bring back the option.

Ferrari’s Galliera did not reveal the number of cars it expects to sell through cryptocurrencies, but he said the company wants to launch this experiment in a world whose popularity has exploded during the pandemic.

Every luxury brand needs to constantly revamp its image to remain aspirational, and digitally native Zoomers often have very different attitudes towards brands and products than any other generation before them.

This is especially true for younger consumers who are disillusioned with traditional finance, known as “TradFi.” Instead, they have turned to decentralized finance, or “DeFi,” such as cryptocurrencies and other blockchain-based commodities as a more attractive alternative.

“Some (clients) are young investors who have built their fortunes around cryptocurrencies,” Galliera said.