Those that profited by speculating on cryptocurrencies by buying high-end watches to celebrate are seeing the prices of both dropping sharply. But the overall market is doing just fine.
Like with financial assets, there is a difference between speculative and long-term investing. So-called trophy watches from makers such as Patek Philippe can be subject to a great deal of speculation. While the list price of such watches isn't falling, the money that speculators are making is.
For example, the price of a Patek Philippe Nautilus 5711A retails for around $35,000. The price surged to $240,000 in the first quarter, a «Bloomberg» (behind paywall) story citing Chrono24.com showed. The same watch can now be had for about $190,000 on the secondary market.
The price of bitcoin has indeed fallen sharply and is now trading at around 22,600, well below the heady prices of late last year when it was nearly 60,000 francs, which has certainly had an impact on trophy watches coming onto the secondary market, as finews.com learned. Another element is that there are an increased number of dealers compared to a decade ago, adding to the speculative pressure.
This certainly shows that the speculative market in high-end watches is taking a hit, which is not the case for watches subject to the hype, as finews.com learned from industry experts. So while watches that are subject to hype and speculative «flipping» are seeing their speculative margins erode, this is not the case for The overall market for Swiss wristwatches is healthy
Healthy Exports
In June, Swiss watch exports registered their eighth consecutive month of growth, with wristwatch exports rosing 6.9 percent in volume terms, equating to an 8 percent increase in value. Watches with a value of over 3,000 Swiss francs ($3,150), the number of watches exported rose by 7.2 percent representing an 11 percent value gain.
While some speculate and look to profit from buying and selling expensive watches, for others they are a symbol of success or the celebration of a milestone. In the banking world, where chunks of bonuses are invested in expensive timepieces, they can be a symbol of rank within a firm's hierarchy as finews.com previously wrote.
Several wealth managers have eschewed investing in cryptocurrencies for their clients. When it comes to watches they generally are likely to prefer wearing them, leaving the speculation in cryptocurrencies and trophy watches to others.
Happy Anniversary
One wealth management firm, Pictet, gave its employees watches in 2005 to celebrate the bank's 200th anniversary. Male employees were given an Audemars-Piguet Royal Oak model and women the Jublilée. Each watch was personalized with the name of the employee engraved on the reverse.
One catch, however, was that the employees has to wait at least five years if they wanted to sell the watch. Some have chosen to do so, and they can be found on Chrono24.com. One particular Royal Oak model from the Pictet anniversary can be had for just under 48,000 Swiss francs ($50,000), which is well above the 2005 retail price, illustrating the value of holding an investment for the longer term.
«Time is the most valuable thing that a man can spend,» according to Greek philosopher Diogenes. For some, an expensive watch is their way of measuring that precious commodity.
