Whiskey, Rolexes, and trading cards are in a spiraling crash as "the bubbles have popped" in collectibles

Thu, 01/18/2024 - 09:23

Brian Dwyer of Robert Edward Auctions shows a 1914 Baltimore News baseball card featuring a 19-year-old Babe Ruth in his rookie year in Chester, New Jersey, on Monday, November 20, 2023.
AP Photo/Ted Shaffrey

Stocks surged in 2023, but it was a rougher year for collectibles.
Indexes tracking whiskey, fine wine, and trading card prices all tumbled.
Rolexes also struggled as the Fed’s aggressive interest-rate hikes spurred Americans to cut back their spending on luxury items.

Stocks and cryptocurrencies had a banner year in 2023, staging rallies that defied market gurus' gloomy outlooks – but it was a much rougher year for collectibles.

Following the pandemic, collectibles surged in popularity, with luxury watches and fine wines comfortably outperforming equities. In September 2022, Swiss bank Credit Suisse even said that Chanel handbags, Rolexes, and traditional Chinese art would offer better inflation protection than so-called safe havens like gold and long-duration bonds.

But indexes tracking the price of non-traditional assets like whiskey and trading cards and luxury watches tumbled in 2023 as consumers responded to high inflation and rising interest rates by cutting back their spending on big-ticket items.

Meanwhile, the AI investing craze powered the benchmark S&P 500 stock index to 24% gains – and cryptocurrencies like bitcoin shook off a dismal 2022 to rack up triple-digit returns. When those assets are performing better, there's less incentive for investors to try to diversify their portfolios by piling into collectibles.

"In 2023, traditional markets experienced a resounding recovery, while collectible markets suffered a continued decline that spread across nearly every sector," Altan Insights, which provides data and analytics on the market for collectibles, said in a recent research report.

"Yes, the bubbles have popped. The frothy markets of 2020 to 2022 are no more."

Here are four collectibles markets that slumped in 2023.

1. Sports and trading cards

logan paul pokemon card charizard stream — Instagram/Logan Paul

Trading cards are now on a two-year skid, per data from Altan Insights.

CardLadder's CL50 index, which tracks the price of rookie cards for 49 sports stars and a first-edition card of the Pokémon Charizard, soared 337% between 2019 and March 2021 – but then tumbled 23% in 2022, and another 9% last year.

To add insult to injury, the market for non-fungible tokens (NFTs) has also tanked over the past two years, with 95% of the digital collectibles now trading at near-worthless valuations.

2. Whiskey

Whisky glass with blurred Delta tail in the backgroud, view from Sky Club deck. — Taylor Rains/Insider

Prices for rare bottles of whiskey have also tanked over the past year-and-a-half, after peaking in May 2022.

The Rare Whiskey Icon 100 index, which tracks the price of 100 celebrated bottles of Scotch, tumbled 22% between then and November 2023.

Cheaper brands are also struggling, with Jack Daniel's maker Brown-Forman posting disappointing sales numbers in December that dragged its stock down 10% in a single trading session.

3. Fine wine

Other alcohol-based collectibles also suffered last year. Liv-ex's Fine Wine 1000 Index tumbled 14%, while its Champagne 50 gauge fell 18% after doubling between the start of 2020 and the end of 2022.

Trendy regions haven't been immune from the sell-off, with Liv-ex's Burgundy 150 Index sliding 18% last year – in a correction that the wine marketplace's chairman and CEO James Miles described as "long overdue".

4. Luxury watches

certified pre-owned rolex — Courtesy of Tourneau Bucherer

Watches haven't managed to avoid the sell-off either, with the Fed's aggressive rate hikes sparking a great Rolex recession.

WatchCharts' Overall Market index, which tracks the price of 60 luxury timepieces, has dropped 13% over the past year, with models from each of the Big Three of Rolex, Patek Phillipe, and Audemars Piguet slumping in price.

It's a far cry from the state of the market 20 months ago – when secondhand Rolex Daytonas were selling for $30,000 and waiting-list times were measured in years rather than months, according to Altan Insights.

Read the original article on Business Insider

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Whiskey, Rolexes, and trading cards are in a spiraling crash as "the bubbles ha…