Crypto-chic: How digital assets influence the dynamics of the luxury market

Abstract

The growing importance of cryptoassets raises questions about their implications for the real economy. Their enigmatic nature has led to the assumption that substantial profits fuel luxury consumption, raising the question of whether digital wealth creation involves a “crypto wealth effect” in luxury markets. Despite growing cryptoassets adoption in investment portfolios, their correlation with luxury goods remains underexplored. This study investigates the long-range memory properties and interdependence between cryptoasset and luxury goods markets from 2016 to 2025 applying econophysics approaches. The findings reveal long-range persistent behavior in all cryptoassets and the luxury goods index, while the S&P 500, NASDAQ, and gold are anti-persistent. Cross-correlation between cryptoassets and luxury markets is positive and increasing, strengthening after 2020, indicating pronounced co-movement. The information flow is bidirectional and time-varying, with Bitcoin acting as net influencer of the luxury market over most of the period, although leadership shifts across market regimes. These results are consistent with a “crypto wealth effect” at the financial market level, but do not measure actual luxury consumption or establish causal mechanisms. Rather, digital asset and luxury markets have become increasingly interconnected in a dynamic and regime-dependent manner. The findings have relevant implications for investors, portfolio managers, luxury brand managers, and policymakers.