Diamonds as provision
«The world may collapse, the economy will suffer, money will depreciate, but diamonds will always be more expensive»
Hello everyone! In this article, we will try to answer the most popular question perhaps among those interested in the project. Why exactly diamonds, but not the dollar, which is the more familiar to all, or gold, in the extreme case?
I would like to note immediately that the primary task of the company is to create a reliable tool for capital preservation. We don`t aim to multiply it, but we want to preserve it in order to increase the asset to cover inflation. It will be a kind of «safe haven», where it is possible to wait out the shocks during the financial crises or the period of alarming events in the asset market. Or if a person wants to just save one`s accumulated money with the lowest possible risks. This is especially important lately, because according to statements by various financial experts in the near future, we will see big changes in the financial market, so this tool will prove to be an excellent refuge. It also should be noted, that this can be an investment of course, but very conservative.
The steady price of diamonds
I’ll start with a good example. Everyone remembers the 2008 mortgage crisis. At that time, when gold reached the bottom, having decreased by 30%, and platinum in general by 60%, the fall of diamonds reached no more than 15% on average, and investment diamonds of the highest quality are even smaller. The crisis was merciless, all assets plummeted, but diamonds suffered the least. But, this isn`t the only case when the price of diamonds is resistant to high fluctuations. Another example can be found in 1987, when there was a market crash, called by «Black Monday». During the big shocks, diamonds and the crisis also lost the least in value. Therefore, based on the above data, we can conclude that diamonds are a stable asset, which is best tolerated by the crisis.
Below you can see a 1 carat round cut diamond price chart:
As you can see, the price grows steadily throughout the time, despite on the various crises and upheavals in the world. In fact, it is difficult to create a general price chart for all diamonds, since each stone is unique and each has its own price dynamics, but all of them are united by a stable upward movement.
Minimal course fluctuations
Another one distinctive quality of diamonds is the minimal fluctuation of the exchange rate. These gems have only quarterly volatility, which is often near zero.
The uniqueness of each diamond
There is also positive properties that absolutely every stone is unique. Every diamond like a fingerprint has certain individual characteristics, among which are carats, color and purity. Each stone is awarded its personal identification number, but it isn`t possible to do with the gold. This unique property brings transparency to a new level, because there will be indicated on the platform those diamonds, which the company currently has and which will be provide the CDC token. But since each stone will have its own unique number and certificate, it will not be possible to carry out any machinations.
Above, we considered the main advantages of diamonds compared to other more popular assets. I would like also to highlight the secondary merits. For example, a fortune can fit in one palm (a diamond with the name «Heart of Eternity», the size of which is 27.64 carats or 5.52 grams costs $ 16 million). Another important quality of diamonds-they are non-renewable natural resources, the amount of which is finite.
It should be noted also, that there are diamonds for jewelry and there are investment ones. The latter, as a rule, start at 0.5 or 1 carat. Earlier, in order to enter the industry of investment diamonds, it was necessary to spend at least $ 15,000 and really high-quality stones start from as little as $ 50,000. Some 5 carat diamonds often have their own name and history. There were also cases when individual investment stones doubled in price in just one year, but these are too impressive figures, since the average growth of high-quality investment stones is about 10% -15% per annum. But these are approximate data, since, as we have already reported above, each single stone has its own price and its own fluctuations.
Dollar as provision?
In the end, I would like to note a dollar. Why we didn`t choose it as a provision? Since the company’s goal is to create a reliable tool for capital preservation, it would be strange to tie it to the dollar. Perhaps it would be the worst option. For the creation of dollars, there is necessary to turn on the typewriter. With diamonds this will not work, because it is a natural resource, which is finite. This is another fact that gives them value.
From the above-mentioned, it can be summarized that diamonds are very resistant to crises, they are constantly increasing in price and have virtually no volatility. In this regard, they are an excellent tool for the preservation of capital.
Investing in diamonds is probably not the best way to increase funds, but as a stable asset for capital preservation- it is the best option.