What is the relationship between the crypto market and the second hand watch market? Indeed, in a negative way, as the decline of the former leads to a decline of the latter.
The recent plunge in the value of cryptocurrencies has had a direct impact on the pricing of luxury watches such as Rolex and Patek Philippe. Chrono24, the largest second hand watch platform, confirmed this in an email to Bloomberg.
This seems to be due to the increasing supply of luxury used watches, for example Rolex Daytona or Patek Nautilus. They therefore attribute the increase to the big sell off in the cryptocurrency market.
In recent years (and especially in 2021), according to experts, the increase in the value of Bitcoin, Ether, etc., has created a new class of buyers who want everything. This has created a situation in which the prices of certain watch models (rare, collectible or iconic) have seen an unprecedented increase in prices. Especially on the secondary market.
Today many digital currencies have lost their value (at least 50% by 2022). So the new class of buyers has turned the other way. That is, they are rushing to sell and liquidate what they had bought in the previous months.
And this, understandably, boosts the supply of second hand watches, resulting in prices falling, halting the long upward trend. Indeed, this development is yet another indication that prices are deflationary in the once thriving second-hand watch market.
Chrono24 co-CEO Tim Stracke explains. The decline in demand for certain models is gradually driving prices on the second hand market to list prices. Which of course was not the case in previous months.
For example, the price of a Patek Philippe Nautilus 5711A, whose retail price is 35,000 dollars. But in Q1 it was $240,000, and now it is down to $190,000.
Let us note that the large discrepancy between first and second hand is mainly caused by the large shortages of ready-to-wear watches. There is difficulty for companies to respond to the high demand due to a number of factors. From shortages of basic materials to problems in supply chains.
