Diamonds as an Investment

For the first time in history, CEDEX is making it possible to trade diamonds like any other financial asset class. This is all made possible through blockchain technology, which solves the main issues of liquidity, transparency, and standardization.

You might be wondering, why has CEDEX gone through all of this effort? Diamonds are a very underutilized asset class and investment. Similarly to gold, there is a very high cost to excavating the resource causing it to act as an outstanding store of value.

Another factor that derives the value of these assets is their use cases. Gold is used 20% as a financial product and 80% for jewelry and industrial use cases. Diamonds, on the other hand, are used 1% as a financial product, and 99% in jewelry and in industrial use cases. CEDEX is hoping to increase the financial product use case, bringing it much more in line with gold.

However, due to the public being more educated about gold, it is much more commonly used as an investment and store of value. Another reason diamonds are not frequently invested in is their complex evaluation process. Some of the main factors involved in the value of a diamond are:

Blemishes: An imperfection on a diamond’s surface
Brilliance: The intensity of the reflections (fire) coming from the diamond.
Carat: Unit of metric measurement used for diamonds
Cloud: A minor inclusion within a diamond
Crystal: An inclusion within a diamond that looks like a bubble.
Color: The color of the diamond
Fire: Light that enters a diamond and is then returned to the viewer
Gletz: Are cracks present?
Luster: The quality of shining by reflecting light from the surface of a diamond.
Opaque: Refers to the transparency of a diamond.
Transparency: Is the diamond see-through?
That’s a lot of factors! This is one of the main reasons diamonds are such an interesting investment class. By using CEDEX’s proprietary machine learning algorithm, the DEX, investors around the world will be able to invest in diamonds while having all the above necessary information revealed to them.

The CEDEX trading arena also reveals useful information such as the gemological composite of a diamond, diamond financial data that is provided within the DDC (Digital Diamond Certificate), and inventory data. Overall, CEDEX is working on creating the ultimate diamond trading and investment experience in the world!

Have you invested in diamonds or gold before? Let us know in the comments below!