The luxury watch market is a fascinating world of speculation, brazen marketing ploys, and, of course, stunning craftsmanship. While generally considered unattainable for the masses, luxury watches have broad appeal as status symbols, keepsakes, and sound investments. Even with its rich history, the industry is still mostly associated with traditional and conservative methods of production. However, that’s not to say that many household names haven’t embraced the digital age.
The Rise of NFTs
The popularity of non-fungible tokens reached new heights in 2021, causing nothing short of a revolution for digital art in particular. The field is no longer exclusively reserved for cryptocurrency experts; the technology has well and truly broken into the mainstream.
Even Christie’s auction house, for example, known to be a real-world safe haven for valuable collector’s items, has created “Christie’s 3.0,” a platform fully dedicated to NFT bidding. The British auction house made watchmaking history in 2019 when Patek Philippe’s Grandmaster Chime timepiece fetched a staggering $31.19 million, holding the title as the world’s most expensive watch ever sold at auction.
The Luxury Watch Industry
Although we might not be aware of it, we are constantly exposed to watchmaking giants like Rolex, Omega, and Cartier. Rolex has more or less become a synonym for “expensive watch,” Omega can boast numerous trips into outer space aboard NASA flights, and Cartier has adorned the wrists of several First Ladies, not to mention countless other A-listers. These practical, alluring accessories have an indisputable level of prestige that has never gone out of style. However, recent developments, such as the debut of NFTs in the watchmaking industry, have rocked the community.
Overlapping Magisteria
The correlation between artwork and NFTs is much more cut-and-dry than that between haute horologie and this hyper-modern technology. Artwork has been traded for centuries, and has always been a relatively speculative market.
The value of a piece of art is generally more open to interpretation than conventional collectibles. Watches, on the other hand, primarily derive their value from their practical functionality and the engineering expertise involved in their creation. Nevertheless, NFTs and luxury watches do share some common ground: Both are considered great investments if you know your way around the market.
The first wristwatch retailer to capitalize on the hype and profitability of NFTs was Jacob & Co. The jeweler and watchmaker from New York City are renowned for their intricate designs and premium materials. Naomi Campbell played an influential part in the brand’s rise to prominence after she was spotted wearing one of their opulent Five Time Zone timepieces in the early 2000s. More recently, Zendaya was snapped on the red carpet wearing their diamond-studded web-shaped earrings to the London premiere of Spider Man: No Way Home. But arguably the most intriguing headlines surrounding Jacob & Co. are those detailing their escapades in the realm of NFTs.
The brand broke new ground in 2021 when they unveiled the first-ever luxury watch NFT. The 10-second animation showcases their SF24 Tourbillon model – an 18-karat rose gold timepiece with a split-flap system displaying the time in 24 cities. This “digital” version flaunts its ties to Web3 by swapping out the cities for 10 different cryptocurrencies. The NFT fetched $100,000 at auction on the ArtGrails website, and the top bidder is reported to have been offered the opportunity to dine with company founder Jacob Arabo, a private tour of the brand’s facilities in Switzerland, and a say in the design of their next NFT collection. Following the success of their first venture, Jacob & Co. has continued to stretch the limits of conventional luxury items, diving deeper into the metaverse with their Astronomia Metaverso collection. This series consists of eight elaborate watch designs named after the planetary bodies – a trend we also saw earlier this year with the resounding success of the Swatch and Omega collaboration. However, in their collection, Jacob & Co. combine the physical and metaphysical: the Mercury, Venus, Earth, Mars, and Jupiter NFTs come with a real, tangible watch, while the other planets remain bound to the Blockchain.
Other Functions
Although it’s a point of contention in the watch enthusiast community, many investors are turning to luxury watches as a way to turn a profit. But when it comes to value retention on the secondary market, the original box and papers included with the purchase of a luxury watch from an authorized dealer are crucial: They guarantee the timepiece’s authenticity and make the overall package more appealing to potential buyers. A simple idea, for sure, but people often misplace this sort of thing, and paperwork and packaging can get damaged over time. This is where NFTs come in: They are slated by industry experts to replace official documents, because they’re much easier to trace and store than physical items. Breitling, one of the big names in Swiss watchmaking, already started allocating an NFT certificate to each of their watch sales in 2020. It’s a great selling point: Not only can owners brag about having an NFT, they also have a secure certificate proving their ownership and the watch’s authenticity, should they want to sell the timepiece later down the line.
Pushback
As with any new technology, not everyone is willing to accept the arrival of NFTs with open arms, and skepticism has been sharpened by the cryptocurrency crash this summer. Many people see this market slump as proof that NFTs are little more than a passing fancy. And although there are never any guarantees that an investment will be profitable, whether it be stocks, a luxury watch, or NFTs, the jury is still out on how these digital assets will evolve in the future. Whatever happens next, it certainly won’t be boring.
