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Vintage & Auctions

Bitcoin vs. Vintage Rolex – A correlation?

2017 was the year of Vintage Rolex and Cryptocurrencies. Collectors and investors of both have seen astronomical rises in their portfolios in a short span. Let’s take a deeper look at this phenomenon.

By Alex Lam

Unless you’ve been living under a rock for the last few months, you’ve undoubtedly heard of Bitcoin. Since the beginning of 2017, Bitcoin has seen an astronomical rise, going from $1,000 USD per coin at the beginning of the year to peaking near $19,000 USD in the fourth quarter. Along with it, a myriad of cryptocurrencies like Ethereum and Ripple have taken crypto markets by storm. Highly speculative initial coin offerings (ICOs) have also seen massive amounts of investor interest. Watch related this bit of news is not, but this rapid increase in prices, what some might claim is a bubble, is not unlike trends we have been seeing in the vintage watch markets. Particularly, vintage Rolex.

Which is better? 1,200 bitcoin or Paul Newman’s Paul Newman?

It is generally accepted in watch collecting circles that nothing is more liquid than a Rolex. For the most part, auction results will tell you this is true. However, vintage Rolex is different than say Patek Philippe which functions more like a store of value. Over the last few years, the watch community at large has seen the values of vintage Rolex sport models rise dramatically, culminating with Phillips’ historic sale of Paul Newman’s personal reference 6239 Paul Newman Daytona this year. For comparison, the $17.8 million result for Mr. Newman’s watch could net you approx. 1,200 bitcoin! 

Across the board, Rolex’s iconic models have seen their stock rise, begging the question: Why? At the end of the day, most Rolexes are commodity watches. They were tools, designed for professionals to do their jobs. As such, Rolex made a fairly large number of them. They certainly made more than Patek, Vacheron, or Audemars Piguet.

So, what drives the value here? We can make the argument that they are iconic, that they have a certain universally appealing design aesthetic, but if you take the example of a vintage Daytona, it is little more than well-dressed Valjoux 72 chronograph. Perhaps that is an overly harsh statement; surely the Rolex faithful will be out for me with pitchforks in hand, but it brings the point into focus. The reason behind these valuations is difficult to understand, much like Bitcoin.

Astronomical rises

Over the past few years, we’ve 300-500% rises in the prices of most vintage Rolex models. Truly abnormal market behavior. By comparison, Bitcoin’s near 1,500% rise in price over a single year is an interesting foil.

I will be the first to admit that drawing parallels between the cryptocurrency market and the vintage sport Rolex market is a bit of a stretch, but they do bear certain similarities. Where they do differ is the consistently volatile nature of cryptos. However, the trend is always upwards. Seen below, the prices of vintage Daytonas and the price of Bitcoin follow similar trajectories, straight up!

1yr Bitcoin Price Chart

Paul Newman leads the pack

Paul Newman Daytona selected prices (Excludes sale of Paul Newman Paul Newman 6239)

While the rise of cryptocurrencies has been led by Bitcoin, one might say that that rise of vintage Rolex has been led by the Paul Newman Daytona. Few other watches have so completely captured the imaginations of collectors. An argument can be made that Christie’s 2013 “Lesson One” auction was the inflection point. Since 2013, the prices of Paul Newman Daytonas has been rising steadily. The above chart focuses primarily of 6262 and 6263 Paul Newman Daytonas for consistency. Even the prices of vintage Daytonas have seen an increase courtesy of its exotic sibling.

Prices of Rolex 6263 over four-year period

The rise of iconic Rolex Daytonas and Bitcoin, the poster child for a post-modern financial ecosystem is a fascinating case study that financial and horological scholars will be digesting for years. Surely, the precipitous price increases in other Rolex models and cryptocurrencies will only continue as collectors and speculators respectively seek value. Within the watch world, Rolex GMTs, Submariners, and Explorers have all seen their stock rise. As a prime example, in November, Phillips sold a Ref. 6150 Rolex Explorer for 200,000 CHF. While the watch had interesting provenance, it still goes to show that prices across the board are trending upwards.

One hell of a ride

A week into 2018, Bitcoin’s price is still above $15,000, but Ether and other alternative currencies have reached all-time highs with Ether’s price above 1,000 at time of writing. With the flood of investor money into the crypto markets, one must question if this is the most recent iteration of a Dot Com bubble. By the same token, can the vintage watch markets sustain consistently increasing prices? Time can only tell, but if vintage Rolexes and watches in general are at all correlated with cryptocurrencies, 2018 will be one hell of a ride!

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