the money game

Anyone Want to Buy a Yacht for $115 Million in Crypto?

View from the deck of Bold – which could be yours for enough cryptocurrency. Photo: Kevin Dugan

Talk to crypto’s true believers and they will gush about how decentralized technology will bring freedom, financial equality, cultural and economic revolution — but if you really want them to turn out to an event, put it on a yacht.

On Tuesday night, the particular yacht in focus was Bold, a 280-foot boat — complete with two helipads and the celebrity DJ Marshmello — that was hosting a party whose sponsors included cryptocurrency exchange Coinbase, talent agency UTA, and Thoma Bravo, the tech-focused private-equity company. The occasion for the boat — docked in the Museum Park Marina, in full view of the FTX Arena, the stadium for the Miami Heat just renamed for another crypto exchange, which hosted an NFT event for some 3,000 people earlier in the day — is that the owners want to sell it for around $115 million in cryptocurrency and were hosting a kind of send-off party for it. (LeBron James and Jack Ma were at one point expected to attend, though neither man did). On land, the line to get on was about a hundred people long. An aggressive crowd of people near the front was held back only by a few zealous bodyguards. “I’m fucking pissed,” one woman from the Coinbase contingent said to a friend at about 8:45, after she and her coworkers were repeatedly told they had to wait to get in. “I paid $45,000 to be here.”

It’s Art Basel Miami — or, more accurately, the crypto tailgate around Art Basel Miami, which has grown so large it’s beginning to eclipse the main event. At the center of all this is the explosion of wealth around NFTs, or, non-fungible tokens, digital assets that typically come bundled with images or videos and have emerged as a way for artists to profit off their work and collectors to make quick money. While the art fair doesn’t officially kick off until Friday, Miami is flooded with panels, parties, after-parties, dinners, and auctions dedicated to these newfangled digital assets. It’s remarkable how much both the city and the traditional art world are embracing their crypto moments, with signs of institutional approval popping up everywhere for something that was, just a few months ago, largely dismissed as a fad. Here in the Magic City, there’s a palpable sense of optimism around NFTs as the future of, well, everything — art, city governance, video games, tax avoidance schemes. At this point, most parties seem to understand that there is potentially a lot of money to be made by entering the blockchain-industrial complex. Of course, there’s also a pervasive, detached sense that the bubble has to burst sooner or later.

This week Miami is chockablock with crypto optimists. Photo: Kevin Dugan

“This week will be the largest sale of NFTs in the history of the planet,” Miami Mayor Francis Suarez, donning a black NFT BZL T-shirt, said in an afternoon speech at FTX Arena. “We want to see how NFT technology can aid us in resilience, transit, and other challenges that we can tackle into the future.”

As lofty as that all sounds, this year’s Art Basel the first in two years –  is all about the spectacle. At the arena, models walked around in slight outfits made of crumpled-up dollar bills or dressed as futuristic superheroes. Among the salt-and-pepper men on the investment end of the NFT economy, there’s a lot of talk about “community,” which, as far as I can tell, is another way of differentiating NFT projects that have an actual following — more than a few people wore merch from the Bored Ape Yacht Club, one of the largest crews — from those that are ephemeral internet trash. “The Bored Apes have done that very well. They’ve been very inclusive,” Chris Adamo, an investor at VC firm Flamingo Capital, said while wearing a JPEG Morgan T-shirt. Paul Judge, a venture-capital investor at Panoramic Ventures, wondered aloud, “How do you explain to someone how being part of some community is useful? Whether that community is an alumni group or a private social club, or country club, you’re around like-minded people.” But while these models of community — tight-knit but exclusive like a private club — have propelled NFTs’ transformation into a major crypto industry, they have also undermined the loftier, democratic ideals that have made it so compelling. Although the speaker list for NFT BZL (as this digital offshoot of Art Basel has been branded) was split about evenly among women and men, the audience was largely white and male — something that wasn’t really lost on the people there. “We saw that in 2021, only 5 percent of all the sales of NFTs went to women artists, and that’s not because women artists aren’t pioneers and innovators in the space but because of things like institutional and systemic sexism and racism,” said an aqua-haired NFT podcaster whose real name — Will Gaines — serves as a homonym for the overriding ethos of the week.

After night fell, the parties sprang up. Spreadsheets and Telegram groups have been trading information about every NFT company and clique that has rented out a bar or restaurant, a mushrooming of events that choked traffic so badly I ended up taking taking a Citi Bike from South Beach to Downtown Miami rather than wait for a projected hour in the back of a Lyft. A party hosted by WallStreetBets, the Reddit forum behind this year’s meme-stock upheaval, took place on the roof deck at Juvia, a trendy and very good restaurant that overlooks Lincoln Road, Miami’s Times Square. As I walked in, an auctioneer was selling NFTs of branded memes and diamond hands — lingo for a holder who can brave the ups and downs of a volatile market — at a rapid pace, bringing in as much as $2,000 per piece. Projected on the wall behind him was an animated loop of two naked women standing in a shower of blood. The party was sponsored by a cigarette company, and a gallery of physical art hung on the walls of the indoor section. “I don’t understand art very well, but we’re going to celebrate the union of these two things — people can buy the NFTs, or they can buy the physical art they see here,” Jaime Rogozinski, founder of WallStreetBets, told Intelligencer. “But more than anything, it’s just a kick-ass party to have good-ass time.” (When I aksed Rogozinski what he thought of Ken Griffin, the CEO of hedge fund Citadel — and a rival of the populist WallStreetBets crowd — beating out a group of like-minded crypto investors for a copy of the U.S. Constitution, he played down their competitiveness. “I wish he could have come to the party,” he said. “I appreciate somebody like that.”)

Later that night, Bold filled up with around 200 people; it was decked out with neon lights and a giant screen that played a loop of an undulating collage of patterns. There was a mix of women in their 20s, younger crypto investors, and a few older finance types who were there to strike deals. The latter group seemed mostly skeptical of the scene but also eager get in on it while it lasted. An adviser to wealthy clients was considering putting together a digital museum in the so-called metaverse (the dream of Mark Zuckerberg and crypto engineers alike of creating an immersive internet), a place for NFT investors to donate their assets and reap the tax benefits that come along with it. “It’s a bubble,” one celebrity-wealth manager said. “It needs to get regulated.”

The boat is scheduled to be sold off on Wednesday at a separate event managed by a superyacht broker (and one of the party’s sponsors), Kitson Yachts, which sells the giant boats to the superrich. Carl Krass, a software engineer whose family owns — and built — the boat, hopes to get at least the majority of the bid in crypto. “Look, we believe in it. We think it’s cool. I live in Switzerland, where a lot of that stuff’s happening,” he said. “We are all looking for more exposure to that too.”

NFT BZL, and the larger scene in Miami, both seem to mark an evolution in how crypto is perceived — as just another way to get a deal done in big-money enterprises, whether a yacht or an expensive piece of art. Still, the associations with tax evasion and drug purchases on Silk Road linger. One investor aboard pointed out the city’s history of financial shenanigans, one of the reasons it’s on a list of cities that require greater scrutiny from the U.S. Treasury for LLCs buying property. “Money laundering, cocaine, crypto,” the investor said. “There’s a reason it’s all here.”

Anyone Want to Buy a Yacht for $115 Million in Crypto?