Tokenized Diamond Market Booms Amid Crypto Banking Crisis as Investors Seek Hard Assets – Here's What You Need to Know
At the time when banks were collapsing last weekend and a major stablecoin depegged, tokenized diamond sales jumped 300%.
Investors turned their focus to digitized diamonds in search of safe haven amid high market volatility brought on by the collapse of no less than three banks in the United States. CoinDesk reported that Diamond Standard saw a surge in its marketplace following these bank closures.
Cormac Kinney, founder and CEO of Diamond Standard, said that the trading volume of the tokenized diamond surged nearly 300% during the last weekend. This jump in volumes was so large that the company's marketplace, Diamond Standard Spot Market, stayed open nonstop.
Notably, per the CEO, most of those who bought these diamonds wanted out of stablecoins. He was quoted as saying that,
"[Sales] of diamond coins and other products increased substantially since Friday on the back of Silicon Valley Bank and Signature Bank being shut down by regulators, USDC breaking its [dollar] peg and amid fears of contagion spreading to other banks and to digital assets."
The popular stablecoin USDC regained its $1 peg price after regulators in the US assured that depositors in Silicon Valley Bank(SVB) could access their money. USDC is the fifth largest coin and the second largest stablecoin by market capitalization with $37bn, while tether (USDT) sits in third place among all cryptos and first place among stablecoins with $76bn in market capitalization.
The New York-based Diamond Standard is a blockchain company that describes itself as a technology developer, diamond market-maker, and "the producer of the world’s first diamond commodities." It tokenized the diamond market, enabling investors to invest in the mineral.
"Our goal is to unlock the
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