The downturn in the diamond market is nothing short of breathtaking. It is driven mostly by a surge in low-cost lab-grown diamond supply, which is capturing a larger market share of the gem industry as cash-strapped consumers gravitate to artificial stones. 

Amy Wu, who worked for FTX Ventures until the crypto exchange blew up, recently joined Menlo Ventures, one of Silicon Valley’s oldest venture firms, as a partner focused on the consumer sector. 

In a viral post on X, the Menlo partner and analyst highlighted how 2023 marked a pivotal year in the battle between natural diamonds and lab-grown stones for market share.

According to trend analytics firm Tenoris, which surveyed 1,500 US jewelry stores, lab-grown diamonds emerged victorious so far in 2024, accounting for 56.8% of diamonds sold, while natural diamonds trailed with 43.2%.

Wu titled the X post “RIP “real” diamonds.”

RIP “real” diamonds pic.twitter.com/gNjtP3QaW2

— Amy Wu (@amytongwu) September 29, 2024

She continued:

RIP De Beers marketing era

— Amy Wu (@amytongwu) September 29, 2024

Ah, yes.

Morgan Stanley analysts pointed out to clients in a recent note that “the trend of increasing lab-grown diamond market share remains unchallenged, adding to the structural challenges being encountered by the natural diamond market.” 

According to Bloomberg data, citing the Diamond Standard Index, natural stone prices have plunged to the lowest on record, with data going back to early 2002. The index has lost 45% of its value since March 2022.

“We expect the market rebalancing to provide a floor for falling prices, but a convincing price inflection is increasingly unlikely before 2025,” Morgan Stanley analysts said. 

Here’s what X users are saying…

Good… now husbands can use their money for more practical things rather than their wife’s insecure ego.

— Shawn Christopher Hollahan (@Shawn_Hollahan) September 29, 2024

As someone whose family is in the business, this chart doesn’t tell the whole story.

Lab is mostly replacing cubic zirconium since the $/ct. is plunging ($1,000s/ct. vs $200ish/ct.).

Thinking lab will replace real is like believing canal st LV bags will run LV out of business.

— Jaimin Desai (@JaiminDesai93) September 29, 2024

I mean… carbon is spectacularly abundant.

— johnnylaw (@JohnnyLaw2021) September 29, 2024

So much for a store of value…