| Read online Welcome to the Alts Sunday Edition 👋 My name is Viral, a diamond dealer who has been following Alts for years. Today I'm going to take you through the diamond market: an alternative asset class in the middle of a huge transition. Lab-grown stones have flooded the market and cratered prices for generic mined diamonds. But that disruption hasn’t touched the rarest tier — ultra-rare, investment-grade diamonds, especially vivid colored stones, which continue to command record prices from collectors and investors. I’ve had a front row seat to both the enduring appeal and the evolving struggles of the trade. I’ll share why, despite the uncertainty, I believe investment-grade diamonds absolutely deserve a place in a thoughtfully constructed portfolio. I'll also give you a sneak peek of a new diamond community built around education, access, and co-ownership of these extraordinary assets. Let’s go 👇 Viral Kothari is a third-generation diamond dealer with 11 years of experience and a global network spanning every facet of the industry. As a Graduate Gemologist from the Gemological Institute of America, his company Aquaduct is on a mission to modernize the diamond world — making it more transparent, accessible, and empowering for collectors and investors. 📈 Alternative data for stocks AltIndex finds breakout stocks before everyone else By the time analysts rate a stock a “buy,” the opportunity is usually gone. AltIndex monitors alternative data to catch momentum early. How it works AltIndex takes unstructured data on thousands of companies from around the web, aggregates it all into one dashboard, and assigns stock scores based on the combined signal. Example: In 2023, AltIndex flagged an unusual spike in web traffic and Glassdoor buzz for Duolingo. Weeks later, the company posted blowout earnings, and the stock jumped 40%. Note: While it has a similar name, AltIndex is independent from Alts.co. |
The timeless allure of diamonds A pure carbon spectacle Have you ever wondered how, even across a room, a diamond can sparkle and catch your eye? That iconic sparkle comes from how diamonds interact with light. Diamonds are singly refractive, meaning light enters the stone and splits along multiple internal paths. | Diamonds have a triple optical effect: brilliance (intense white light reflections), fire (rainbow-like color flashes) and scintillation (the sparkle that flickers as the diamond moves). |
Diamonds are marvels of natural engineering. Composed entirely of tightly bonded carbon atoms, they are the hardest naturally occurring substance known to man. | On the Mohs scale of Mineral Hardness, diamonds score a perfect 10. The word diamond comes from the latin word adamas, which means ‘indestructible’. |
The rise of diamonds (and De Beers) The earliest recorded mentions of diamonds date back to 4th century BCE India, where they were symbols of power — prized for their beauty and practicality as cutting tools. For centuries, India remained the world’s only real source of diamonds. This all changed in 1725 with the discovery of Minas Gerais in Brazil, which sparked a diamond rush that helped fund the Portuguese Empire. The modern diamond industry began in 1866, when a boy named Erasmus Jacobs stumbled upon a 21-carat stone on the banks of South Africa’s Orange River. This discovery led to the explosive growth of the Kimberley mine and the founding of the most important diamond company in history: De Beers. | The Kimberley Mine in South Africa triggered the world’s first diamond rush, and was the birthplace of De Beers; which by the 1900s controlled 90% of global diamond production — a near-total monopoly. |
But the diamond's status as a cultural necessity wasn’t inevitable — it was concocted through brilliant marketing. Marketing magic: From luxury to necessity During the Great Depression, the diamond industry was struggling. De Beers chairman Harry Oppenheimer (no relation to J. Robert Oppenheimer) partnered with ad agency N.W. Ayer to revitalize US demand. The result was one of the most recognizable slogans in history: "A diamond is forever" | "A Diamond is Forever” is perhaps the most famous slogan in advertising history. Coined in 1947, it anchored De Beers' campaign for decades. |
By linking diamonds with eternal love, suddenly the target market for diamonds went from "wealthy people," to "literally everyone who is getting married." Results were incredible: Sales surged 55% in just a few years. Before 1948, fewer than 10% of engagement rings featured diamonds; by the early '90s, it was nearly 80%. Diamond sales eventually grew 100x from $23 million to $2.1 billion by the end of the 20th century. The diamond market today The De Beers monopoly is over The diamond market is in the midst of a significant reset. Once controlling 90% of global supply, De Beers has faced decades of antitrust pressure, and the rise of major competitors like ALROSA (Russia), Rio Tinto (Australia), and a host of independent producers (mostly across Canada and Africa) Today, De Beers holds just 28% of the global market. This decentralization has created a far more fragmented, transparent, and price-sensitive marketplace. On the wholesale side, mining companies now sell rough diamonds through open tenders, extracting maximum value. On the retail side, tech platforms like RareCarat and Blue Nile have given consumers near-wholesale prices. The result? Middlemen are being squeezed Margins are shrinking Few players are willing to hold much inventory. Nobody likes a monopoly. But the fact is that without De Beers’ unified marketing muscle, the emotional resonance of diamonds has started to wane. In the shadow of De Beers' legacy lies fragmented brand narratives and a commoditized feel. The lab-grown elephant in the room Over the past decade, lab-grown diamonds have emerged as one of the most disruptive forces in the diamond industry, growing at ~19% YoY. Synthetic diamonds are chemically, physically, and optically identical to natural diamonds. Only machines can tell the difference (these are easily available, and all reputable jewelers have one). In a 2024 survey, 52% of couples in the US said their engagement ring featured a lab grown diamond. There has been a clear shift in consumer perception, and justifiably so. For most young couples it probably makes sense to put their savings towards a house, a honeymoon, or even splurging on a dream wedding. So, have lab grown diamonds had an effect on prices? Yes, absolutely. But not in the way you may think... The prices of lab grown diamonds have fallen by more than 90% in the past decade. There is now virtually no resale value, as supply is unlimited. In fact, De Beers recently shut down its lab-grown division! That's right — the same company that once drove mass-market diamond demand now sees lab-grown as a dead end. It's similar to what happened with smart TVs: the tech improved, the cost of production fell like crazy, and the average sale price sank like a stone. But natural diamonds are another story. The retail price of natural diamonds has bounced around, but is mostly flat since 2016: | On the surface level, lab grown and natural diamonds are indistinguishable. But when it comes to long term value, the difference is stark. |
Paradoxically, the rise of lab-grown diamonds has helped to bolster the investment case for natural diamonds — particularly the blue-chip diamonds desired by private collectors and investors. Great asset, tricky investment market Diamonds, especially investment-grade natural diamonds, have historically demonstrated some terrific qualities: Global recognition: 75 years after "A Diamond is Forever," they’re still widely understood as valuable across cultures. Small and portable: Unlike say, whiskey barrels or Ferraris, you can store millions of dollars in a pocket-sized asset. Capital preservation: Top-tier stones tend to retain or appreciate in value over time. Durable: They don’t rust, decay, or expire. A well-kept diamond will last centuries. Uncorrelated: Prices don’t simply follow stock market trends. But despite their strengths, diamonds have never taken off as a mainstream investment class. Here's why: 1. Opaque pricing Unlike gold or stocks, which have universally accepted spot prices, diamond pricing is still fragmented and inconsistent. For now, most of the market still operates through private dealer networks and paywalled databases. This means two stones with similar specs can vary widely in price due to nuances like fluorescence, provenance, or cut quality — making it tough for the average investor to know if they’re getting a fair deal. 2. Illiquidity Diamonds don’t have an easy secondary market. If you buy a diamond today and want to sell it tomorrow, where do you go? A local jeweler? An auction house? Most likely, you’ll face: Slow deal cycles Wide bid-ask spreads Uncertainty about true value This lack of liquidity is one of the biggest barriers preventing financial institutions and retail investors from entering the space. 3. Lack of standardization Every diamond is unique, which complicates indexing and makes it harder to create tradable investment products. Unlike fungible assets like gold, diamonds lack uniformity. That said, efforts to solve this are underway. For example, Alts covered a company called Diamond Standard a few years ago — they’ve developed a regulator-approved, fungible diamond commodity by combining many stones into a single standardized unit. It’s a promising step, but broader institutional adoption is still limited. Investment-grade diamonds: A league of their own Diamonds come in all types — from small melee stones to fancy shapes, colored gems, and rare collector-grade pieces. Within this world, investment-grade diamonds are a niche category: rare stones with unique origins and lasting value. They generally fall into two groups: Ultra-rare Fancy Vivid colored diamonds The idea that all diamonds are rare is largely a myth. Most diamonds, even mined ones, are relatively common in quality and appearance. True rarity comes from a combination of exceptional factors like unique color, high clarity, large size, and origin. Only a tiny fraction of diamonds possess these. Fancy Vivid is the highest color saturation graded by the GIA. A rare 10 carat fancy vivid blue dubbed “The Mediterranean Blue” was sold at Sotheby’s May Auction in Geneva for $21.5 million. Over the last two decades, the price of vivid pinks went up 6x, while vivid blues increased 4x. | Source: Fancy Color Research Foundation |
This appreciation is nice, but nothing illustrates how fancy vivid diamonds preserve wealth better than the lack of dips: there were no price corrections during the 2008 economic crisis or the 2020 pandemic! Provenance-based diamonds Some of the world’s most valuable diamonds come from historic or now-defunct mines whose output can never be replicated. A perfect example is Australia’s Argyle mine, which produced over 90% of the world’s pink diamonds. When the mine shut down in 2020, it effectively cut off the world’s supply of these vibrant stones overnight. | Discovered in the 1970s, the legendary Argyle mine in Western Australia’s Kimberley region produced over 90% of the world’s pink diamonds. The mine ceased operations permanently in 2020, and no comparable source has been found since. |
Since the mine closed in 2020, Argyle pink diamonds have become even more sought after. Over the past two decades, prices have conservatively increased over 5x, driven by unmatched color saturation, growing collector demand, and vanishing availability. | Each year, more of these rare pink Argyle diamonds are absorbed into private collections, reducing the available supply even further. |
The natural diamond supply is shrinking Zooming out, the Argyle story is part of a broader trend: natural diamond supply is shrinking fast. As mentioned earlier, the Argyle mine, source of nearly all the world’s pink diamonds, ceased operations in 2020. There is no viable replacement in sight. Canada's Diavik mine is expected to close before 2030. Even output from legacy mines in Russia and Africa is declining due to cost pressures and environmental constraints. With no major new sources on the horizon, and demand from wealthy buyers in Asia and the Middle East growing, scarcity is accelerating, especially for the rarest, most desirable stones. Today, most generic white diamonds are at a 20-year low. Sentiment is down. Dealers are hurting. The short-term market looks bleak. But if you zoom out beyond the short-term cycles, what you see is a once-in-a-lifetime buying opportunity for those who actually know where to look. Introducing Aquaduct: Your gateway to diamond ownership As a third-generation diamond dealer, I’ve had a front-row seat to both the enduring appeal and the evolving struggles of the trade. Despite its potential, diamond investing has remained largely inaccessible. How does someone navigate a space filled with: Opaque pricing Complex + inconsistent grading Limited liquidity or resale options I created Aquaduct to change all this. My mission is to solve the key challenges of diamond investing — bringing transparency, curation, and liquidity to a market that lacks it. I'm building a platform to offer a curated, transparent gateway into the diamond world. My approach is built around three pillars: Curated access: We only work with truly exceptional stones, vetted for rarity, provenance, and long-term value. Our selection process will be communicated with data backed research and comparable prices. Education and clarity: We break down the complexities of the diamond market, from grading to valuation, in a clear and approachable way. Our goal is to empower participants with the knowledge to navigate the space confidently, regardless of prior experience. Community: We're building a network of collectors, investors, industry experts, and diamond lovers; creating a trusted space to engage with one of the world’s most enduring assets. First offering: The Timeless Experience Remember those pink Argyle diamonds I told you about? We just launched our first offering: The Timeless Experience, a gated community of industry experts, passionate collectors & jewelry lovers. Members gain exclusive access to investment-grade stones curated by industry experts. | This is a private, invitation-only membership blending co-ownership, education, and community. |
We are creating and curating priceless, investment-grade pieces using pink diamonds from the Argyle mine. This community is designed for those who see the long term value of diamonds as living symbols of history, art, and value. | Me giving Altea members a sneak peek of our Timeless Turtle prototype during the NYC Altea meetup in May. Members got a first look at our early model and sketch designs. That's a half-carat pink Argyle diamond in the top right. |
By bridging physical craftsmanship with digital ownership, the Timeless Experience offers a rare opportunity to shape the future of diamond collecting, together. Interested? Join me and become part of the story from day one. Closing thoughts The "dumb money" consensus around diamonds is that lab-grown has stolen the show and demolished prices. But that's not the full story! Yes, generic diamond prices are at generational lows. But supply of the rarest stones is drying up fast. And while everyone’s focused on lab-grown dragging prices down, savvy investors are looking where supply is vanishing and value is rising. The majority of the industry accepts that there are now multiple parallel markets: Lab grown for price sensitive consumers Generic mined diamonds that are not rare Ultra-rare mined, investment-grade stones It's interesting, because the generic mined diamond market has taken a big hit due to lab grown. But the ultra-rare stones are getting bucketed together, while they are actually a completely different category! Just last week, a rare fancy pink diamond linked to Marie Antoinette sparked a bidding frenzy and sold for $14 million at Christie's. | The Marie-Thérèse Pink, once linked to Marie Antoinette, sold for nearly $14m — doubling its estimate on provenance alone. |
This is a perfect collector’s stone, it has both rarity and provenance: A 10ct fancy color purple-pink is extremely rare for both the carat weight and color of the stone. A kite shape cut is very unique adding even more to the rarity of the stone Add to the fact that it probably comes from India’s closed Golconda mines and has such a royal history makes it even more desirable to a collector. Bottom line: In a world that moves fast, flooded with hype, and full of short-term plays, ultra-rare diamonds offer true, lasting value. Want to explore these rare acquisitions, discuss real world asset tokenization, or just talk diamonds? Book a chat with me. I’d love to connect with you. 💎🙌 That's it for today! You can find me answering diamond questions in the Alts Community. See you next time,
Viral Disclosures This issue was written by Viral Kothari and edited by Stefan von Imhof This issue was sponsored by AltIndex Altea has holdings in Diamond Standard Aquaduct did not pay to be featured in this issue This issue contains no affiliate links | 