Cryptocurrency is hitting luxury goods

The meltdown in cryptocurrency prices and the resulting depletion of perceived wealth have taken a toll on sellers of some high-tech luxury goods – especially used watches from Rolex and Patek Phillipe, Bloomberg reported on Friday (July 1).

According to Bloomberg, the average price of used luxury watches rose in the midst of the rise in stock and crypto prices and stimulus checks from the federal government. Used luxury watches even became safe havens for some investors who got nervous about volatile markets earlier this year.

About 25% to 30% of the demand for luxury goods was driven by the rise in cryptocurrencies, analysts at Jefferies said, according to the report. These prices are falling now, although the prices of new luxury watches seem to be holding up.

Bloomberg said the “holy trinity” of watches – Rolex Daytona, Patek Philippe Nautilus and Audemars Piguet Royal Oak – “traded for many multiples of their retail prices.” The broader second-hand market for luxury has remained strong, although it is receptive to some of the same market forces that watches have faced.

Beyond the crypto market, stimulus checks have come to an end, inflation is rising and buyers in China can withstand closures again. The prices for the most sought after used watches are around 25% below the top, while the waiting lists for some models of new watches can exceed two years.

At the same time, the report noted that sellers of watches including Cartier, Omega and Tudor see that the supply exceeds the demand for some models.

In another luxury sector, RH, formerly Restoration Hardware, recently reported that they expect weakened demand through the end of the year.

See also: RH says that high mortgage rates kill the demand for luxury homes, furniture

RH, which offers furniture for the home, said that sales for the whole year fell by 2% to 5%. Just a few weeks earlier, RH released record quarterly results showing that sales had increased 11% from a year ago – and almost 100% in the last two years – for the three-month period to the end of April.