Speculators need money
Crypto crash floods market with luxury watches
08/01/2022 12:03 p.m
Rapidly rising crypto prices created greater demand for luxury on the wrist. But with the crash of cryptocurrencies, things are now going in the other direction. Crypto gamblers monetize their luxury watches.
The crash of cryptocurrencies around bitcoin has an unexpected consequence: the market for second-hand luxury watches is experiencing a veritable glut. The prices for models from Rolex and Patek Philippe, which were previously difficult to find, are falling significantly due to the growing range, as the financial news agency “Bloomberg” reports, citing the Chrono24 trading platform. The Karlsruhe-based company claims to have more than half a million luxury watches on offer.
That doesn’t mean the collectibles are cheap though. The prices of some models have recently increased. “Whereas a Patek Philippe Nautilus 5711A – new price 35,000 US dollars – was sold for up to 240,000 US dollars in the first quarter, the current prices are around 190,000 US dollars”, according to Chrono24. That’s still more than five times the list price. Although the prices achieved have fallen in recent weeks, they are still well above the level of recent years.
Turnaround in interest rates depresses cryptocurrencies
A long-booming market had sent cryptocurrency prices through the roof. According to “Bloomberg”, this ensured that a new group of buyers for luxury watches was created, which drove up the prices for some models from Rolex, Audemars Piquet and Patek, for example. The price gains were fueled by the extremely loose monetary policy of the most important central banks and the great willingness of many investors to take risks.
When many central banks, led by the US Fed, began to end the flood of liquidity in the face of high inflation, cryptocurrencies plummeted. Many speculators ran out of money to gamble. And some of them resell their purchases.
In the first half of the year, Chrono24 recorded an increase in trading volume of more than 50 percent compared to the first six months of the previous year. Company boss Tim Stracke attributes this to two reasons: on the one hand, the prices of some models have risen, on the other hand there is a larger range.