Martin Roscheisen‘s Key Points • Lab-created diamonds now dominate the sub-$10,000 market, driven by affordability, technology, and changing consumer attitudes. • Falling retail prices and efficient production have made lab-created diamonds a stable, profitable category for jewellers. • Emerging innovations, such as cryptocurrency-backed diamonds, highlight intersections between technology and consumer investment. |
Six years ago, we anticipated that consumers would rapidly embrace lab-created diamonds.
It was predicted that if trends continued, one category (lab-created diamonds) would represent 99 per cent of the market, while the other (mined diamonds) would represent 1 per cent of the market.
As of today, we have reached more than the halfway mark of this in the US market.
It was also said that jewellers would start to notice that they sell jewellery products, not raw materials. Diamonds, like gold and steel, are materials, not products.
Jewellery is something different - just as flour, butter, and eggs are not patisserie.
Indeed, the jewellery business will remain alive and well for the foreseeable future, using quality components, including lab-created diamonds.
The allure of diamonds holds; however, US consumers do not care to pay to support foreign miners for a product that is literally atomically identical. These consumers see through the marketing claims of supposed scarcity that have never been true.
They instinctively know that mined diamonds support bad regimes and autocrats who
abuse their population.
Diamond Foundry is now months away from producing more carats each month than the De Beers Group is mining.
Its technology has scaled by factors of ten in multiple dimensions - ten times less energy consumed per carat, ten times larger rough, ten times larger reactors, the list goes on.
Diamond Foundry’s production uses zero-emission energy resulting in a negative carbon footprint overall.
Soon, the Federal Trade Commission (FTC) can assume that lab-created diamonds are the default expectation for consumers, to be called just ‘diamonds’.
This would mirror the practice for cultured pearls, which no one labels ‘cultured’ any longer. Retailers continue to be intensely profitable with man-made diamonds, despite the ever-present negative commentary from the industry’s trade press and analysts who, at the end of the day, mislead the industry.
Because retail overhead and digital marketing expenses are real and fixed, retail pricing for lab-created diamonds has reached a sustainable level.
The diamond jewellery market for products under $10,000 has been lost to mined diamonds in favour of a better product, lab-created diamonds. Is there a future for mined diamonds in the jewellery market for products more expensive than $10,000?
Sure, there are still buyers willing to spend more for a ‘special occasion’ piece. And since not everyone wants or can wear a very large diamond - especially for fine-boned fingers smaller in diameter than a 20-carat polished stone - mined diamonds may continue to appeal to this group.
This is where VRAI’s innovation with Bitcoin Diamond comes in. It’s a VRAI lab-created diamond with a value backed by Bitcoin.
Cryptocurrency, of course, is the asset that diamonds have always wanted to be – genuinely scarce. It is liquid and transparently priced, just not tangible.
The tradition of gifting a diamond ring for an engagement is rooted in romance, love and caring; however, it is also, specifically, the cold utility of a source of funds for when a rainy day comes.
And those do occur for many couples for all kinds of reasons. That original purpose got lost in today’s retail-priced diamond ring, barely fetching a small fraction when truly needed.
Many people say that lab-created diamonds have no resale value. Well, natural diamonds priced at retail have very little either.
If historical trends continue, VRAI’s Bitcoin Diamond will yield even more than the original purchase price. It is instantly liquid with transparent pricing available to anyone, with no questions asked.
It’s another example of the lab-created diamond category presented as a superior product.
That raises an interesting question: Would you rather get engaged to someone who loves to splurge on consumption or to someone who makes savvy investments?
THE GREAT DIAMOND DEBATE III
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