The barrage of mishaps and catastrophes in the cryptocurrency market just keeps on going. Following the collapse of major cryptocurrency exchange FTX, other crypto-related companies have seen their fortunes falter. BlockFi, a crypto lender, has filed for bankruptcy, Bitfront, another crypto exchange, is shutting down, the world’s largest cryptocurrency exchange, Binance, has been shoring up its “Secure Asset Fund,” and in the last couple weeks, at least three big crypto players have died in mysterious circumstances. It’s been a rough month for the industry. Now, crypto owners who spent big using their trading profits are unloading their assets amid the fallout. The NY Post reports:
Crypto bros are running on empty — and appear to be offloading their fancy cars amid the fallout from the FTX implosion, which has rippled through the cryptocurrency market and caused the value of digital coins to plummet.
An uptick in like-new models of sought-after luxury cars have hit resale sites such as AutoTrader in recent weeks, but they’re not fetching the premium prices they once did. The Mercedes Benz G-Wagon — the unofficial “new money” badge of the crypto rich — was once valued around $300,000 in the resale market but is now closer to $200,000, car experts say. Other luxury vehicles such as Lamborghini Urus and McLaren Spiders have also taken a hit.
Some luxury car insiders believe the purge is linked to the FTX collapse, which caused as much as $2 billion in client money to evaporate.
“Exotic car market is getting decimated right now,” CarDealershipGuy, the anonymous CEO of a luxury car dealership who pens an eponymous newsletter, tweeted on Nov. 22, noting that a 2021 Mercedes G-Wagon with just 3,378 miles sold for $187,000 at auction. “That’s nearly an $80,000 (or 30%) drop in under 12 months,” he wrote.
More recently, on Nov. 25, a 2020 Mercedes G-Wagon — the G63 AMG model — with 3,992 miles sold for $179,000 at auction, down from around $240,000 last year, he told The Post.
“It’s clear that in the last couple of months the decline in prices for exotic vehicles has accelerated and that correlates very, very well with the meltdown in the crypto markets where we know that some of the biggest customers of exotic vehicles were crypto millionaires,” CarDealershipGuy said.
The Mercedes G-Wagon, which costs upwards of $140,000 for the 2023 model, has cemented itself as a status symbol among celebrities, CEOs and crypto investors, some of whom made a quick buck in the volatile market and wanted to show off to the world. In August, The Post profiled a former Amazon delivery driver who became a self-made crypto millionaire and scooped up a G-Wagon with his profits.
Action Line: Many cryptocurrency buyers are just now learning that it’s the return of assets, not return on assets, that is more important when it comes to investing. If you need help building an investment portfolio, let’s talk. In the meantime, click here to subscribe for my free monthly Survive & Thrive letter.
E.J. Smith - Your Survival Guy
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