Fashion and Cryptocurrency Collide in the Most Unpredictable Way
The fashion industry today is worth approximately 1.7 trillion US Dollars with brands like Nike, Gucci and Louis Vuitton ranking as the highest brand value globally. One might wonder, however, what fashion has to do with crypto. Like many other industries, the fashion industry is starting to incorporate the crypto industry into its everyday practices.
Many high-end fashion brands have started to dip their toes into the NFT world. While fashion and NFTs may seem worlds apart at a glance, both have the same fundamental core focus – rarity and status. The list of major fashion brands that have, in one way or another, embraced the use of NFTs has become quite impressive. With brands ranging from Gucci, Prada and most impressively, Nike.
Alex Salnikov, Co-founder and Chief Strategy Officer of community-centric NFT Marketplace, Rarible believes that fashion and NFTs highly complement one another and have great potential for both industries when they collaborate. He mentions that “the fashion and NFT industries often revolve around the same core principles of artistic expression, continuous innovation, and rarity, and as such, make for a natural and very promising partnership”. He goes on to say that he believes “further collaboration between the two sectors will allow both industries to continue to evolve in new ways previously thought unimaginable and will usher in an exciting new era of digital and physical fashion”. This reinforces the notion that rarity and artistic expression are two big groups of mutual inclusivity between the fashion industry and NFTs.
NFTs give major brands new, innovative ways to interact with their target market spanning art, fashion and gaming. The hype surrounding NFTs has allowed for some of the world’s most iconic brands to profit with hundreds of millions of dollars in additional revenue, emphasising the mass consumer appeal of digital collectables. NFTs burst onto the mainstream market in 2021, with collections such as the Bored Ape Yacht Club and CryptoPunks generating billions in lifetime sales. The hype surrounding digital collectables then eventually caught the attention of major brands that then began experimenting with the technology to better connect with their buyers. The impact of this technology is expected to leave a lasting mark on many industries, including fashion with major brands like Nike and Adidas planning to take their NFT ambitions into the Metaverse. With this, the brands hope to extend their presence into the virtual world.
Market leaders including Nike, Gucci, Dolce & Gabbana, Adidas and Tiffany have amassed a cumulative $260 million worth of sales from NFTs, according to data from Dune Analytics, first reported by NFTGators. Nike’s NFT drops have amassed $185.3 million in revenue, with volumes in secondary markets approaching the $1.3 billion mark. Dolce & Gabbana has generated $25.6 million worth of NFT revenue. Tiffany launched its NFTiff token allowing CryptoPunk holders to mint customized pendants and has amassed $12.6 million in NFT-related sales. The total NFT revenue for Gucci and Adidas is $11.6 million and $10.9 million, respectively. While estimates vary, investors and technologists foresee a fruitful future for the NFT market. Research conducted by Bitcode Method suggests the value of the global NFT market to reach approximately $230 billion by the end of the decade.
A major advantage of collaborations between the fashion industry and the crypto industry is that the fashion industry embracing the use of cryptocurrency has allowed it to attract a new target market of people who may not have otherwise spent money on these brands. Similarly, this relationship also benefits the crypto industry, bringing it more exposure.