Cryptocurrency prices have been dropping consistently and alarmingly for investors. With so many industries having heavily diversified into blockchain technology, it is not surprising to see consequent bankruptcies. However, it is surprising to see the prices of niche products being affected by the fall. We are talking about the Rolex Daytona, which reached a record high this year as one of the most desirable watches. Cryptocurrency gains, stock market gains, stimulus money, and speculation all contributed to the bubble in second-hand timepieces. What’s happening in the secondary watch market is a stark reminder that the bling boom might not last. The roaring stock markets of 2021 and the rise of cryptocurrencies fueled a broader interest in investing in alternative assets, including non-fungible tokens and timepieces. In addition to long-time collectors, a new breed of young timepiece traders has emerged. All buyers chased the same models, regardless of their experience level.
Daytona, Patek Philippe & Audemars Piguet 25% of Peak Trading Price While Tudor Remains Unaffected
Rolex Daytona, Patek Philippe Nautilus, and Audemars Piguet Royal Oak were trading for multiples of their retail prices by February or March. Also highly sought-after were the skeletal pieces produced by Richard Mille. With the S&P 500 flirting with a bear market, and Bitcoin losing about 70 percent of its value since November, that demand is now evaporating. There is a growing sense of caution among buyers. The absence of stimulus payments, higher interest rates, and soaring inflation are contributing factors. There may have been an increase in supply due to Chinese lockdowns and fewer Russian buyers. Among the most spectacular gains have been the Daytona, Nautilus, and Royal Oak. According to estimates, prices are about 25 percent below their peaks. Private transactions, however, may not be reflected in market data.
As collectors diversified beyond the obvious names or were priced out of them, some brands are doing better, such as Cie Financiere Richemont’s Vacheron Constantin and A Lange & Sohne. There were some cheaper models that did not see the same increases as more expensive ones, such as Tudor, a Rolex sister brand. Genuinely rare pieces continue to be in high demand, as opposed to those perceived as scarce. Although the secondary market correction may make it a little cheaper to buy a Rolex, it might not necessarily make it easier to find one. Because not all gains in the secondary market have been erased, many new models have waiting lists of at least two years.
Crypto Wealth Accounts For 30% Luxury Good Sales As Per Jefferies Analysts
It still feels like a bargain to buy a Rolex in a store. Some Cartier, Omega, and Tudor models are also in short supply at Watches of Switzerland Group, which operates boutiques in Britain and the US. Other luxury goods, such as handbags, are susceptible to some of the same factors that inflate watch prices. There has also been an influx of younger buyers, for example. So far, though prices have risen, it has not experienced the same bubble as other markets. Timepieces may be a preview of what is to come in luxury resale and top-end retail stores.
The same factors that boosted watch demand also boosted demand for athletic shoes, bags, and fine jewelry. According to Jefferies analysts, cryptocurrency wealth accounted for 25 to 30 percent of the growth in US top-end sales last year. Stock markets are also closely related to demand. There will likely be strong US revenues from big luxury houses in the second half of the year, but sales will be lower than in 2021.