It was the spring of 2021, and Miami’s hottest nightclubs were filled with phone calls from cryptocurrency entrepreneurs that no one had heard of. They wanted to reserve multiple tables or rent the entire venue for the entire evening for half a million dollars or more.
When the price of Bitcoin hit $60,000 at the time and the cryptocurrency went mainstream, its biggest beneficiaries flocked to the Florida city to flaunt their wealth at lavish parties.
“Unfortunately, all these crypto guys started coming down and spending a lot of money — like, crazy amounts of money,” said Andrea Vimercati, director of food and beverage at Moxy Hotel.
“They were booking a table for $50,000, and who are these people,” added Vimercati, the former director of Groot Hospitality, which runs Miami’s hottest nightclubs including Liv, Story and Swan.
“95 percent of the new guests were men and young people. . . in a kind of nerdy way,” 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 stopped ringing after the collapse of the Bahamas-based FTX stock exchange, disrupting the market and affecting the industry. Vimercati said the cryptocurrencies that frequented Miami clubs “completely disappeared.”
Those on the dance floor were behaving like there was no tomorrow. In that case, it turns out they might be right. “They wanted to show that they had no limits,” Vimercati recalled. “They would order 12 or 24 bottles of the most expensive champagne, and even take a shower without drinking it.”
In June of last year, a group claiming to have just sold a cryptocurrency company celebrated an unexpected event at E11even, a neon-lit nightspot with trapeze troupes and burlesque shows. “50 Cent was performing and they were spending over a million dollars,” said Gino LoPinto, an operating partner at the club. “They paid in cryptocurrency.”
LoPinto recalled, “They brought out tubs of champagne and gave 50 Cent a wad of cash to throw away.”
E11even started accepting cryptocurrency payments in April 2021. The club did more than 6 million dollars in transactions last year. But in the past three months, the club processed less than $10,000 — “a monster, a big drop,” he said.
The crypto crowd was eager to show off their newfound wealth, LoPinto said, explaining how customers would prove how rich they were by opening crypto wallets on their smartphones.
“You wouldn’t normally show your bank account, but people are showing their crypto wallets,” he said. “I’ve seen more crypto wallets in one year than I’ve seen bank accounts in a lifetime.”
The never-ending parties highlighted Miami’s status as the epicenter of the US cryptocurrency industry. Florida’s low taxes were a big draw, as were less onerous Covid-19 restrictions, making the city a magnet for revelers.
In March 2021, FTX paid $135 million to secure the 19-year naming rights for the Miami Heat basketball team’s arena. After moving from Los Angeles in June 2021, the Bitcoin Conference was held in Miami.
Miami club operators have always been able to count on a few big weekends like Art Basel, the Ultra music festival and New Year’s Eve. But over the past two years, attendees at bitcoin events have demanded many tables and in some cases bought out entire seats for private parties.
“The bigger crypto weekends, the groups that came in for private purchases, were these young tech kids,” said Alan Roth, owner of the Rosa Sky rooftop lounge. “It costs 20 percent to 50 percent more than what we do on a typical night to buy.”
Cryptocurrencies have also flowed into other parts of the Miami luxury scene. “They bought big houses for 25 million dollars, rented big yachts. . . they had money and they were spending it lavishly,” said Brett Harris, executive director of luxury sales at real estate firm Douglas Elliman. “They were buying big houses with cash, no financing – they converted Bitcoin to cash to buy.”
“It was revenge,” Harris said, adding that crypto-entrepreneurs wanted to buy properties to entertain with home theaters and water features.
Michael Simpkins, chief executive of E11even’s Miami-based cryptocurrency operation, said: “The money came pretty quickly for a lot of them, and when it comes quickly, it’s easier to spend.”
Roth is hopeful that the last source of demand for Miami’s luxury lifestyle will return. “I don’t think the crypto market will fold and end. It’s like a regular market – it goes up and down. I don’t understand that they are afraid.”
Not everyone agrees. “We don’t think they’re coming back,” Vimercati said.