The Crypto Collapse Has a New Victim: Luxury Watches


Crypto has suffered a long, hard fall in recent months, and has triggered a declining demand chain that is likely to get worse before it improves.

The luxury watches in the secondary market of the Rolex and Patek Philippe brands, which were sold at record prices earlier this year, have fallen, Bloomberg reports. It is the first luxury sector to feel the effects of the collapse of the crypto, but it is unlikely to be the last.

Why is demand growing in the first place? In addition to cryptocurrency and stock market gains, the cash stimulus strengthened the second-hand watch market, a segment of the larger luxury goods market, which includes handbags, designer shoes and fine jewelry, among other items. high cost. Rampant inflation and the war in Ukraine contributed to its attractiveness, as buyers were looking for tangible value stores.

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In addition, some younger shoppers entered the market for the first time, including Gen Zers, attracted in part by watchmakers ’response to their interest in ethical consumerism.

“As a luxury brand, we can now bring people together at cleaning events,” said Rolf Studer, co-executive director of Swiss watch brand Oris. The New York Times. “Ten years ago, everyone would have said, ‘This is crazy.’ People wanted a glass of champagne. Now they’re going to the beach to pick up the trash.”

In particular, Rolex and Patek Philippe watch owners saw great benefits from the boom. At one point, the three most popular models: the Rolex Daytona, the Patek Philippe Nautilus and the Audemars Piguet Royal Oak, got their retail prices many times over. For Bob’s Watches, the Rolex Daytona, which debuted in 1963 and became popular with racing and performance enthusiast Paul Newman, sells today for a minimum of $ 14,550. (Newman’s Daytona was recently auctioned off for $ 17.8 million).

Now, higher interest rates, continued inflation and the absence of some Chinese and Russian buyers due to confinements and the ongoing war in Ukraine have pushed this demand back, bringing prices down by about 25%. Although handbags and other luxury items have not yet experienced a similar decline, the fall is not off the table, as demand for them was fueled by the same factors driving the watch market.

Related: 5 tips for selling luxury products on Facebook and Instagram

Only time will tell if the clocks return quickly or if the threat of an impending recession wipes out their luxury counterparts.



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