Diamond hands

Diamond prices have hit rock bottom in the last few months. These low prices might spark investor interest in the USD 1.2 trillion asset class. However, diamonds are a difficult to access or trade, with no futures markets and no exchange traded funds. Several attempts to make the diamond asset class accessible have failed in the past. There is a new effort called Diamond Standard using blockchain technology. This involves offering bars and coins that contain equally valued amounts of diamonds that are stored in a vault and whose ownership is recorded on a blockchain. These coins and bars can be traded on digital asset exchanges or peer-to-peer. However, so far trading liquidity looks low making it less attractive for investors. Also, mined diamonds face increasing competition from lab-grown diamonds, especially in lower-priced segments of the jewellery market and that is putting pressure on diamond prices.

Source: Diamond Standard, December 2024.