How Do You Protect the Price of an Asset?

Falling or not, LGD (lab-grown diamond) prices are a point of constant contention as people voice the need for stability to ensure long-term maturity. And sure, most of this conversation focuses on the supply side of the equation. But here’s my take: falling prices aren’t always a bad thing. Sometimes, they signal something exciting—rising utility.

Take AI as an example. Prices for AI solutions are dropping rapidly. In some cases, API costs have gone down by 1000x over the course of ~2 years. But this isn’t devaluing the technology. Quite the opposite: it’s unlocking new use cases, putting AI into more hands, and ultimately creating trillions of dollars of value.

Being in the software industry, I cannot support the idea that an "unlimited supply" of something means that it is not valuable. Most SaaS products are inherently not constrained on the supply side, for example. It is about the value that it adds to the people who buy it.

Sure, for luxury products, the illusion of rarity helps. Because the value-add is the snob value. But if you say diamonds are only valuable because you can show them off, then you are missing the inherent beauty and elegance of the product and its craftsmanship.

Stop looking at LGD like a luxury product, and you realize that lower prices mean more utility, more applications, more demand. And then maybe, just maybe, we will be able to seek those applications and really match the supply with real consumer demand.

Key Takeaways

1. Falling prices can drive innovation: As costs drop, more industries and consumers can access and benefit from the technology or product.

2. Unlimited supply doesn’t mean zero value: Value is determined by the impact and utility it provides, not just by its scarcity.

3. Reframing the narrative: Viewing LGDs as utility products rather than purely luxury items can open up a broader range of applications and markets.

This isn’t about artificially inflating prices to maintain a perception of exclusivity. It’s about finding real, scalable applications that drive demand naturally.

What do you think? Should we continue to hold on to traditional narratives of scarcity-driven value, or should we embrace the opportunities that falling prices bring?