uxury watchmakers in Germany have noticed a significant decline in the market value of their products due to this event. The company Chrono24 reports that over 500K Rolex and Patek Philippe watches are available on its website, indicating an overall economic impact for these two brands at about 10%.
Sought-after models such as the Rolex Daytona and the Patek Nautilus 5711A are seeing price drops as new secondary market buyers created during the crypto bull market that saw bitcoin reach a $69K peak in November 2021 have seen a massive decline in fortunes.
According to Jefferies analysts, crypto wealth will account for 25 to 30 percent of high-end sales in the United States in 2021. Bitcoin, which peaked near $17.5K in June 2022, is now worth $23980K at the time of writing, representing a 65 percent drop from its peak. Stimulus payments and stock market gains also aided the growth of the used market.
With the recent price decline, popular models are comparable to their counterparts from last year. For example, Audemars Piguet’s Royal Oak watch sells for $107K instead of its peak price, which was recorded at just under 50% higher than where it currently stands today (around 40k). Other brands have also done well despite selling much more expensively, such as Cie Financiere Richemont SA, with an average cost increase of about 29%.
Chrono24 has seen an increase in demand for luxury watches in the past few years. In early 2022 they partnered with Swatch to allow bitcoin payments on their platform, and now investors are investing more time into storing value rather than just making money off of interest rates or inflation rates which can be unstable sometimes due to economic fluctuations worldwide.
The price increases have encouraged many sellers who want high resale values after buying these expensive pieces from brands such as Girard Perregaux Laureato & Certain Pieces From Breitling And Cartier.
McKinsey forecasts market expansion
With backing from Bernard Arnault, the founder of LVMH and Stracke, says that $2.2 billion worth of transactions occurred on their platform last year, with Luxury Furnisher RH reporting some declines in sales compared to earlier this month but still up 2-5%.
A report by McKinsey predicts revenue for secondary markets will grow over time, reaching around 32 billion dollars in 2025 before surpassing expectations when it reaches 29%.