The Watch Market Crash: Time to Invest?

By Francesco Enserro

London, United Kingdom

A Rolex Oyster Perpetual “Tiffany”, currently valued at $15,000-20,000. (via Rolex.com)

With large market-cap cryptocurrencies such as Bitcoin and Solana at all-time lows since the pre-pandemic period, the watch market has crashed with a demonstrated correlation between these currencies and more exclusive timepieces.

For the last year and a half, the average price of a Rolex on the secondary market increased by over 30-40%, with some pieces even doubling in value due to the limited nature of the item. Somehow, the watch market had lain relatively dormant over the last thirty to forty years, yet as resale prices rise, far more light has been shed on comprehensive collections, allowing price gougers to tally up huge sums of profit, and increasing exposure for the more iconic pieces, such as Audemars Piguet’s Royal Oak. Previously, waiting list times have been known to rest above twelve months due to supply shocks, increasing the already overwhelming demand.

Now, with many economies in a recession, inflation running rampant, and huge financial instabilities, prices have well and truly crashed for these iconic pieces, with some now lying close to retail price. This poses a question: are these truly a good investment?

Aging like fine wine, some of these classic watches can garner up to 10% unrealized profit annually, and have proven to do so over the course of the last ten to fifteen years. As a rule of thumb, if you can apply for a classic watch such as a Rolex Oyster Perpetual and the waiting time is under a few months, it’s worth applying for no upfront cost. After this, you’ll be able to make a 20-30% profit on an immediate flip on the secondary market, depending on the exact model.

As a longer-term hold, though, you’ll have to be wary of the general economic climate. It’s possible that firms such as Rolex will start increasing their retail prices in accordance with inflation, as they did by 4.24% at the start of 2022; this will end up boosting your original investment. Certainly, this is a relatively safe investment longer-term and has proven that its growth outweighs any interest rate that you’ll be paid in a bank or even a larger index fund, and, if your chosen company decides to discontinue your model, you’ll be in for a likely bonus ranging from 20-30% within a few months.

As the economic climate begins to solidify, it will be useful to see what governments are doing in a macroeconomic scope; crypto’s bull run arose due to huge stimulus checks and large quantitative easing, reflected in the skyrocketing growth of the watch market.

It’ll be tough to invest in a good model, but it’s another piece of art to add to your collection that almost guarantees solid nominal profitability.