ICECAP’S VALUE INDEX: WHAT IS IT?
The Value Index is simply a tool to easily determine what diamond NFT is currently the best value, using objective measurement. Here’s how it works.
- Icecap’s “program standards” result in approximately 500 different combinations of color, clarity, and carat weight-range.
- Icecap uses existing industry price sheets to determine a theoretical “Investor Price Level” for each of these combinations. This is a level between the trade price, and a low e-tail price. In other words, a sophisticated investor, buying diamonds knowledgeably, will likely pay less than typical e-tail price, but more than typical trade, or wholesale, price. For this purpose, Icecap uses a multiplier of 1.15x over trade price to achieve a theoretical “investor price level.”
- Icecap then compares the asking price on every listed diamond NFT to the theoretical investor price at that moment in time. This produces a percent number that is either above that price or below that price. (Example: +2.3%, -4.1%, -3.7%.)
- Icecap’s Value Index then ranks all the diamond NFT’s by this percent number, sorted lowest to highest. Theoretically, the diamond at the top of the list is being offered at the best value.
HOW INVESTORS CAN USE THIS TOOL
Unlike jewelry buyers, diamond investors won’t generally care about a diamond’s ranking on the Four C’s scale (carat-weight, color, clarity, cut-quality) as these factors are already discounted in the price. Further, Icecap’s program standards already ensure every diamond is the right quality to be able to be sold easily when the time comes to liquidate.
What diamond investors do care about is buying the diamond as close to “trade” price as possible, because that will bear directly on their ability to make a profit or minimize loss when it’s time to liquidate.
Industry price charts aren’t perfect, but they are the best tool available for this purpose. By comparing diamond NFTs on the basis of Value Index, investors can choose the diamond(s) priced as close as possible to the theoretical trade price.
While anyone with an OpenSea account is able to make buy offers (bids) on diamond NFTs, Icecap itself always guarantees a bid on whichever diamond is currently at the top of the value index. This enables the owner of that diamond to sell instantly if they wish, or to wait until a buyer comes along and picks off their top-of-value-index diamond.
Furthermore, Icecap makes available to every diamond NFT owner the knowledge of what asking price would be required to put their own diamond NFT at the top of the value index.
Finally, Icecap also provides the approximate bid it would make for that diamond if it was offered for sale at top-of-value-index price. (Note: Icecap presently delivers this information manually via email request, but will soon provide it in real-time, automated form.)
Using Icecap’s Value Index, investors always know:
- What diamond NFTs are priced closest to trade price and should be bought first.
- What price an investor would need to put on their own diamond NFT for it to rank highest on the value index, and hence be likely to sell quickly.
- What price an investor could sell their diamond for instantly, with a mouse click, via Icecap’s guaranteed bid.
For more information, please contact Icecap.