Miami nightclubs grieve the absence of high-flying crypto entrepreneurs: Report

Summarising this article as there might be a paywall for some of you. It was an interesting read for me, enjoy!

‘Revenge of the nerds’ screeches to a halt after collapse in value of digital currencies

In the spring of 2021, Miami’s hottest night clubs were overwhelmed with phone calls from cryptocurrency entrepreneurs that nobody knew. With the price of bitcoin then at $60,000 and crypto becoming mainstream, its biggest beneficiaries had descended to flaunt their newfound wealth: Lots of tables were being reserved, some even renting an entire venue for a whole evening at a cost of half a million dollars or more.

“Out of nowehere, all these kids from crypto started coming down and spending like, an insane amount of money,” said Andrea Vimercati, director of food and beverage at Moxy Hotel group.

“They were booking tables for $50,000, and it was like, who the hell are these people,” added Vimercati, former director of Groot Hospitality, which operates some of the hottest night clubs in Miami including Liv, Story and Swan. The new partygoers were “95 per cent men, young . . . with a kind of nerdy style,” he said. “You couldn’t tell they had a lot of money if they were just walking around.”

A little more than a year later, the phones have stopped ringing after the collapse of Bahamas-based exchange FTX roiled the market. The crypto revellers frequenting Miami’s clubs have “completely disappeared”, Vimercati said, 'They were partying like there was no tomorrow, on hindsight they were right'

In June last year, one group who sold their crypto company celebrated the windfall at E11even, a luxurious night spot with troupes of trapeze dancers and burlesque shows. “50 Cent was performing, and their spend was more than a million dollars,” said Gino LoPinto, operating partner at the club. “They paid in crypto.” LoPinto recalled: “Bathtubs of champagne were brought out, and they gave 50 Cent a bunch of cash to throw.”

E11even started accepting payment in cryptocurrency in April 2021. The club processed more than $6mn worth of transactions last year. But in the past three months, the club has processed less than $10,000 — “a monster, huge fall”, he said.

The crypto crowd were keen to boast about their newfound wealth, said LoPinto, who described how clientele would prove how rich they were by opening up the crypto wallets on their smartphones. “You wouldn’t normally show your bank account, but people do show their crypto wallets,” he said.

Crypto money had flooded into other parts of Miami’s luxury scene. “Big houses were being bought for $25mn plus, big yachts rented . . . they were spending money lavishly,” said Brett Harris at real estate firm Douglas Elliman. “Big houses were being bought by converting Bitcoin into cash. It was revenge of the nerds,” said Harris

There is hope that the latest source of demand for Miami’s glamourous lifestyle will return. “I don’t think the crypto market is going to be done. Just like the regular market, it goes up and down. I don’t get the sense that they’re afraid.”

However, not everyone agrees. “We don’t think they’re coming back,” Vimercati said.