Many crypto buyers have been consumed by a single, persistent question as they’ve watched the prices of coins rise and fall over the past few years: When Lambo?
Lambo is shorthand for Lamborghini, the luxury vehicle that’s the ultimate symbol of success when it comes to getting rich off of digital currencies, and the focus of thousands of “wen Lambo?” memes. Along with high-end watches and other traditional displays of wealth, the supercars have for years been a fixture at Bitcoin conferences and on the Instagram feeds of crypto influencers.
The recent crash in the price of crypto has flooded second-hand markets with other luxury goods, including Patek Philippe and Rolex watches. Lamborghinis, however, are doing just fine. The strong demand for supercars suggests most owners inhabit a rarified stratum of trophy seekers, those who are so wealthy that they’re essentially undisturbed by changes in the market.
Peter Saddington is one of them. He became famous in the crypto car community after he bought a Lamborghini in 2017 for 45 Bitcoin, equivalent to more than $200,000 at the time. He had bought the Bitcoin for just $115 in 2011, back when the cryptocurrency was worth less than $3. The move helped popularize purchasing luxe cars in crypto. Today, even after the crash, the 45 Bitcoin he spent would be worth $1 million.
Saddington said many of his friends in the industry are still in the market for luxury cars. Big price shifts are par for the course in digital currencies and shouldn’t get in the way of luxury car purchases, said Saddington, now an investor in crypto projects.
Over video chat, Saddington showed off a sleek, black Mercedes he bought in April using money he earned from Bitcoin mining. He said he has no plans to sell his original Bitcoin Lamborghini: “It’s in the other garage.”
AutoCoinCars, an online platform founded in 2018 that lets buyers purchase luxury cars with digital money, has seen sales on its platform double to $12 million in the past year, a rate that’s holding steady, said Chief Operating Officer Luke Willmott.
The company often registers more luxury vehicle sales during times of market turmoil, Willmott said. Part of the reason for that, he believes, is because Lamborghinis tend to be less volatile than digital currencies. “People are spending because they want to exit out of their crypto and get into physical assets,” he said. “That will allow them to then have this asset that doesn't depreciate like how their crypto asset will depreciate.”
Indeed, in a cruel twist of the markets, Lamborghinis have recently held their value better than cryptocurrencies. The prices of Bitcoin and Ether have plunged by more than 50% since November, and platforms and lenders like Celsius Network and Voyager Digital have recently gone bankrupt. Meanwhile, the price of a used Lambo has held about steady over the last year, according to CarGurus.com.
Lamborghini sales last year were higher than ever and are on pace to exceed that record this year, according to financial disclosures last week from the parent company Volkswagen AG. Part of the reason sales have held up so well is that supplies are low and waitlists are long. O’Gara Coach Co., a high-end Southern California auto dealership with an option to purchase cars in crypto, hasn’t seen any change in Lamborghini sales since the market tumult set in. A spokesman said the dealership’s Lamborghini waiting list is more than a year and a half long.
The allure for cryptocurrency speculators is similar to what drives just about any wealthy person to spend so much on a small automobile. “If you want a really fast car, you can get something else for a lot cheaper. If you get a yacht, you can take your family on vacation,” said SHL0MS, a pseudonymous nonfungible token artist. A Lamborghini “purely exists to flaunt wealth,” said SHL0MS, who in February exploded a Lamborghini Huracan on camera in an effort to mock crypto industry excess. (The resulting NFTs sold for $2.2 million.)
Most people hurt by the crypto crash never made enough to buy a Lamborghini in the first place, but there are some who got in over their heads. CJ Wilson, a retired professional baseball player who owns several luxury auto dealerships in Fresno, California, said he’s seen more people in recent weeks trying to sell their vehicles. The previous bull market may have lured some traders into a false sense of security, Wilson said: “People get suckered into this narrative that things go up only.”
This article was provided by Bloomberg News.
