Historically, both Bitcoin and luxury watches, both marked by scarcity, have shown a positive correlation in prices.
Correlation Between Bitcoin Price and Watches
The correlation between the prices of Bitcoin and luxury watches, reinforced during the Covid years by unprecedented liquidity injections, seems to have finally been broken. The approval by the US SEC of 11 Spot Bitcoin ETFs earlier this month marked a turning point, attracting increased institutional interest towards Bitcoin and diverging its trajectory from that of luxury watches.
Greta Yuan, Head of Research at VDX, a regulated exchange in Hong Kong, points out that institutional interest in Bitcoin, reinforced by the ETF, is a key reason for this divergence.
Bitcoin is essentially known as digital gold, so it’s not surprising that it has better preserved its value than luxury watches over the past year.
Future Perspectives for Bitcoin and Luxury Watches
While luxury watches continue to be affected by restrictive monetary policies, Bitcoin stands out as an investment asset. Analysts at Morgan Stanley note a decline in luxury watch prices partly due to monetary policy and a reduction in speculative trading in luxury assets.
