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Luxury Watches Flood Secondhand Market After Crypto Crashes

Neil lives in Canada and writes about society and politics.
Published: August 2, 2022
After the crypto crash, luxury watches are flooding the secondhand market as speculators scramble for money during the crypto collapse.
A Patek Philippe Nautilus Travel Time Chronograph Full Diamond 5990/1400G (£2.1M) is seen on sale at the London Watch Show on March 19, 2022 in London, England. As the digital currencies market has experienced an unprecedented collapse this year, the volume of luxury watches hitting the secondhand market has increased significantly. (Image: Leon Neal/Getty Images)

In 2022, after digital currencies such as Bitcoin and Ethereum endured an unprecedented and sustained crash after reaching astonishing all time highs in 2021 and being unable to maintain them, luxury watches are flooding the preowned market as underwater holders scramble for cash liquidity.

Watch trading platform Chrono24 told Bloomberg for a July 29 article that demand for “trophy” watches such as the Rolex Daytona and the Patek Nautilus 5711A “is now much larger.”

Chrono24, which is headquartered in Karlsruhe, Germany, directly attributed the glut to the crash in cryptocurrency prices, stating market conditions “has directly impacted pricing of luxury watches from brands like Rolex and Patek Philippe,” according to Bloomberg.

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In June, Bitcoin took a stumble from the all-time high of more than $65,000 set in 2021, hitting a low of roughly $17,500.

The development is significant as it is the first time in Bitcoin’s history that a market correction has broken a previous cycle’s high. 

Bitcoin’s high during the 2017 bubble was roughly $19,800. When that cycle deflated, although Bitcoin cratered to a low of $3,100 only a year later, it still kept a healthy gap between the 2013 bubble’s high of roughly $1,150.

Ethereum, Bitcoin’s largest competitor, reached a high of more than $4,800 in November of 2021. In June, the token tagged under $900.

Bloomberg explained, “Surging valuations for crypto currencies had minted a new class of luxury buyers, leading to an unprecedented price increase for models particularly from brands like Rolex, Audemars Piguet and Patek.” 

“Now that many digital tokens have been hammered, these consumers are going into reverse.”

A notable indicator of the trend for Chrono24 CEO Tim Stracke is simply that trading volume on the platform, which has more than a half million pieces for sale, jumped more than 50 percent during the first half of 2022. 

The demand coincides with both the collapse of digital currency and a 25 percent correction in the U.S. stock market.

The hallmarks of a bubbling economy manifest significantly in the watch market. According to Stracke, the price of a Nautilus 5711A, which retails for $35,000, was fetching $240,000 in the secondhand market.

The price has dipped to approximately $190,000, he added.

The trend is not to be underestimated. In February of 2021 as the new bull run was already manic with Bitcoin fetching $40,000, luxury car dealership owner Tilman Fertitta told CNBC that his stores had already sold 17 super luxury models, such as Bentley and Rolls Royce, to clients paying with Bitcoin.

Feritta’s dealership started accepting Bitcoin for payment in 2018.

But for retail investors, almost always caught buying high amid hype and selling low amid fear, panic, and despondency, market crashes are not a joking matter.

In May as Bitcoin lost more than a quarter of its value, deflating rapidly from almost $40,000 to under $27,000, Australian website News.com.au reported the story of one individual who told online observers they lost their $450,000 life savings after the Terra Luna “stablecoin” was wiped out amid controversy.

They told the Terra Luna section on social influencing and social marketing website Reddit that they “cannot pay the bank,” implying they may have taken out a home equity loan to gamble.

“I will lose my home soon. I’ll become homeless,” they stated.

Another individual tweeted their personal indiscretions, “I bought 300,000 UST on BiKe and Binance with a loan. Now I can‘t trade or withdraw coins. How do you compensate me?”

Some stated they lost more modest life savings of $5,000. Another user, likely residing in a country with a much smaller economy, stated they lost their life savings of $85.

In another curious case dubbed the “Bitcoin Family,” a man named Didi Taihuttu first gained media attention when he sold all of his family’s assets during the 2017 bubble to purchase Bitcoin. 

CNBC said Taihuttu and his wife and three daughters, “Liquidated all they owned, trading a 2,500-square-foot house and virtually all their earthly possessions for bitcoin and a life on the road.”

Fortunately, the Family appears to have purchased at the very start of that cycle’s bull run when Bitcoin was still $900.

This article was published, however, on July 2, when Bitcoin had dumped from $65,000 to under $20,000, themed around how the family had lost $1 million on their investment amid the market crash. 

Taihuttu, however, appears to have greater wisdom and execution abilities than the average investor and speculator. He told the outlet he sold 15 percent of his holdings at $55,000, recognizing the coin would quickly correct. 

“I’m buying bitcoin daily,” he told CNBC, apparently from a beach in Portugual.

“That’s the bitcoin life.”