Diamond Prices Crashed 90% | Here’s What Happened

Finance / Market Takeaways (Diamonds as an Investment)

• The video argues that diamonds (both lab-grown and natural) are not yield-generating financial assets, and therefore are not good investments for most buyers.
• The primary driver of the cited “price crash” is supply and demand—especially lab-grown diamond oversupply—which then spills over into natural diamond pricing.

Tickers / Assets / Instruments Mentioned

• No stocks, ETFs, bonds, macro tickers, or crypto are mentioned.
• The only instruments referenced are consumer commodities in the form of:
  • Lab-grown diamonds (LGDs)
  • Natural diamonds
  • Diamond jewelry / engagement rings

Key Numbers and Price Declines

Lab-grown diamonds (LGDs)

• Prices fell ~75% to 90% from peak.
• Example (1-carat lab diamond):
  • Previously: ~$3,500
  • Now: ~$300 to $500

Natural diamonds

• Fell ~30% to 40% from post-pandemic highs.
• Also cited as dropping up to ~70% from a longer-term 2011 peak.

Resale / buyback expectations

• Natural diamond resale: generally ~20% to 50% of the original retail purchase price (framed as “wholesale vs retail math”).
• Lab-grown diamond resale: ~0% to 15%.
  • The video claims many jewelers/secondary buyers refuse buybacks for practical reasons.

Retail markups

• Natural diamond retail pricing often includes ~30% to over 100% markup versus wholesale.

Explicit Recommendations / Cautions

• Core recommendation/caution: Treat diamond purchases as sentimental luxury items, not investments.
• If buying lab-grown: buy for aesthetic/interest and upfront cost savings, not for expecting resell profits.
• If buying natural: presented as the “traditional choice,” with relatively higher resale retention (still not framed as a strong investment).
• Resale caution: Selling typically requires moving from retail to wholesale terms; lab diamonds may face additional reluctance from buyers to purchase.

Methodology / Framework Used (Economic + Resale Logic)

• Supply and demand mechanism
  • Lab production can scale up (factories, tech improvements, hubs like India and China).
  • This creates oversupply, driving rapid price declines.
• Cross-market demand shift
  • Consumers switch to lab diamonds perceived as comparable in value.
  • Natural diamonds lose demand, especially in the mid-tier engagement ring segment.
• Resale market segmentation
  • Retail purchases flow into a wholesale resale channel.
  • Loss is explained via:
    • Retail markups
    • Taxes
    • Overhead
    • Wholesale margin
    • Additional evaluation/remount costs for pre-owned stones
• Implied investment test criteria
  • Diamonds provide no interest or dividends.
  • Value depends heavily on resale pricing and dealer willingness.

Science / Identity Claims (Supporting the “Market Substitution” Argument)

• Lab vs natural are not “fake” (per the video):
  • Both are described as pure carbon with the same rigid 3D crystal structure
  • Both described as Mohs hardness 10
• Differences listed (non-financial, but relevant to pricing/resale verification):
  1. Origin: Earth mantle (~1 to 3 billion years) vs reactor-grown (weeks)
  2. Rarity: finite geology vs scalable production with machinery/electricity
  3. Trace elements: natural often ~98% nitrogen type 1A; lab often type 2A
  4. Cost example (1 ct benchmark): natural ~$3,000–$6,000+ vs lab ~$200–$500

How experts identify lab vs natural (Verification methodology)

• Laser inscriptions (LG/lab-grown prefixes on certificates; viewed under ~30x microscope)
• UV light + spectroscopy
• Growth pattern analysis (e.g., internal crystal-layer patterns; high-pressure vs natural)

Disclosures / Disclaimers

• The provided subtitles do not explicitly show a legal disclaimer like “not financial advice.”
• The video does state a clear stance: diamonds are not investments and should not be treated as yield assets.

Presenters / Sources Mentioned

• C Pratik Sha (host/voice), “intelligent investor channel”
• GIA (Gemological Institute of America) mentioned as an example of a professional lab used to distinguish stones.