As the world grapples with interest rate hikes and inflation, the cryptocurrency market has quietly slipped into relative destitution. Housing affordability and cost of living concerns have rightly taken precedence in the public eye, however, it must be said the collapse of cryptocurrency has been nothing short of spectacular. Over the past few weeks, external global factors have placed significant downward pressure on the industry, seeing the values of certain coins drop substantially, and it’s not just bit players, either.
According to the University of New South Wales, sell-off in Bitcoin saw the currency’s value fall to USD$17,592.78 in mid-June, marking the first time since December 2020 that it had fallen below USD$20,000. Similarly, Ethereum dipped a whopping 70 per cent from its all-time high in November last year, prompting the world’s largest cryptocurrency exchange, Coinbase, to sack a staggering 18 per cent of its staff. Naturally, the downward spiral has economic investors in a panic, but for those with a penchant for more tangible assets, the cryptocurrency collapse represents a rare opportunity to buy in. A new report from Bloomberg has revealed that the collapse in crypto has significantly eased supply of the world’s most sought-after watches, meaning for the first time in a long time, collectors can get their hands on a new Rolex or Patek Philippe.
According to the report, the recent uncertainty surrounding cryptocurrency has seen more owners unload their high-end timepieces, with supplies for the Rolex Daytona and Patek Philippe Nautilus 5711A now “much larger”. In a statement provided to the publication, online watch trading platform Chrono24 revealed that dwindling crypto values have “directly impacted pricing of luxury watches from brands like Rolex and Patek Philippe”.
The Karlsruhe-based business is one of the largest dedicated second-hand watch retailers and marketplaces in the world, currently holding more than half a million timepieces on its website. Over the past few years, Chrono24 has reaped the benefits of the surging interest in the luxury watch market, capitalising on the new wave of buyers. As Bloomberg points out, the rapid rise in valuations for cryptocurrencies opened up a new category of comsumer, driving the prices of particular models and brands such as Rolex, Audemars Piguet and Patek Philippe sky-high.
According to the Federation of the Swiss Watch Industry, the market has more than doubled in size over the last two decades, up from CHF10.297 billion in 2000 to a staggering CHF22.302 billion in 2021. While there were increases across the board, the growth was largely due to emerging patronage from China, which grew its imports of Swiss watches from CHF45 million in 2000 to CHF2.96 billion in 2021. It wasn’t just new watches getting the attention, either. Earlier this year, we reported that scarcity and other external factors had shifted the second-hand luxury market.
An advocate for the popular online watch community Australian Watch Buy, Swap and Sell (AWBSS) revealed that potential, FOMO, and status symbol had seen the sentiment around watches move more into the investment space. For example, the iconic Rolex ‘Hulk’ has risen in price from around AUD$27,000-$28,000 BNIB in 2020 to the high AUD$40,000 to $50,000s mark. A number of other key pieces had more than tripled in price, leading many to question if the “bubble was about to burst”.
It seems the penny may finally have dropped, but not for the reason avid watch fans were expecting. The Bloomberg report suggests that the continued hammering of certain cryptocurrencies has forced the once investment-friendly buyers into reverse, selling off their assets at an alarming rate. Chrono24 co-CEO Time Stracke told the publication that the recent global impacts have seen prices for the most sought-after timepieces fall loser in line with similar watches. At the same time, the watch retailer revealed that training volumes on the platform have jumped more than 50 per cent in the first half of 2022.
Most notably, collector’s pieces that offer a degree of status have seen enormous changes. Just last year, a rare 1957 Omega Speedmaster sold for $4.6 million, shattering records while a similarly incredible Philippe Dufour piece went for $10 million, making it the most expensive independent watch ever sold. Taking a quick look on Chrono24, however, there’s a noticeable increase in available models that were once thought of as hard-to-get. In a stark contrast to last year’s scarcity-induced price surge, some Rolex Submariners are going for as little as USD$10,000, suggesting that the market may finally be correcting itself.
While the latest news may be a knock for crypto fans, the tide is rising for watch lovers. Increased availability would certainly drive prices down and remove the barrier to entry for the luxury watch game, making it slightly easier to secure that grail piece.
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