The centuries-old paradigm of the global gemstone trade is experiencing tectonic shifts that threaten the very foundations upon which the perception of value and luxury is built. Investors, accustomed to fluctuations caused by inflation or geopolitical tensions, are now facing a completely new kind of uncertainty. Anxiety is spreading through the diamond industry, but its source is not in economic forecasts, but in the quiet yet unstoppable rise of a technological marvel: lab-grown diamonds. This disruptive innovation has caused panic among traditionalists, but at the same time, it has created unprecedented opportunities for those willing to embrace change. The speed at which synthetic diamonds have gained market acceptance is astonishing, and the key lies in a complete change of perception. They are chemically, physically, and optically identical to their natural counterparts, but are sold for a fraction of their price, often at discounts of 80 to 90 percent. Regardless of whether you consider them "real" or not, lab-created diamonds are irrevocably changing the rules of the game, and anyone thinking about buying, selling, or investing in diamonds must carefully follow this development.

What Actually Are Lab-Grown Diamonds?

It is important to immediately clarify one of the biggest misconceptions: lab-grown diamonds are not imitations like cubic zirconia or moissanite. They are not "fake" diamonds; they are truly diamonds. The difference is not in composition, but exclusively in origin. While natural diamonds were formed over billions of years deep beneath the Earth's surface under extreme pressure and temperature, lab-grown diamonds are created in controlled environments that replicate the same process in a fraction of the time, usually within a few weeks. There are two dominant production methods. The first, known as HPHT (High Pressure/High Temperature), most accurately mimics natural conditions. A tiny piece of diamond, known as a "seed," is placed in a chamber with carbon and exposed to immense pressure and temperatures exceeding 1500°C. In such conditions, the carbon melts and crystallizes around the seed, layer by layer, creating a larger, raw diamond. The second method is CVD (Chemical Vapor Deposition). In a vacuum chamber filled with carbon-rich gases, such as methane, a diamond seed is heated, and the gases decompose. Carbon atoms then deposit on the seed, "building" the diamond atom by atom. Both methods result in crystals that are identical to natural ones and require an expert gemologist's eye and advanced equipment to determine the difference.

The Price Shock That Reshaped the Market

Just a decade ago, lab-grown diamonds were considered a niche product, and their price was only about 10% lower than natural ones. However, technological advancements, optimization of production processes, and economies of scale, primarily in production centers like China and India, have led to a dramatic drop in production costs. Consequently, prices in the retail market have plummeted. Today, it has become common for a lab-grown diamond to be sold at a discount of 80% to even 90% compared to a natural diamond of identical size, color, clarity, and cut. This price collapse was the main catalyst for the explosion in market share. Data shows incredible growth: in 2015, synthetic diamonds accounted for a negligible 1% of global diamond sales, while it is estimated that by 2024, this share had grown to approximately 20%. The change is even more evident in the engagement ring market, which was traditionally a bastion of natural diamonds. According to data from the wedding platform The Knot, in 2024, as many as 52% of center stones on engagement rings were lab-grown, a huge jump from only 12% recorded in 2019.

A Paradigm Shift: How Consumers See Diamonds Today

Consumer attitudes, especially among younger generations like millennials and Gen Z, are key drivers of this revolution. Today's buyers are increasingly informed, pragmatic, and guided by a different value system. Many are willing to choose a lab-grown diamond to get a significantly larger or higher-quality stone for the same budget. The perception that "a diamond is a diamond," regardless of its origin, is becoming more widespread, especially since the layperson's eye cannot spot any difference. In addition to the financial component, ethical and environmental aspects have become extremely important. The issue of "blood diamonds" and conflicts funded by their sale, although largely suppressed by the Kimberley Process, has left a permanent scar on the industry's reputation. Additionally, the environmental footprint of mining—vast amounts of excavated earth, water consumption, and ecosystem disruption—stands in sharp contrast to the laboratory process. Although labs also consume significant amounts of energy, many producers are turning to renewable sources to further emphasize their sustainability. A buyer who a decade ago could afford a modest natural diamond for their budget can now buy an impressive lab-grown stone for the same amount that would have been previously unattainable.

Industry Titans Knocked Down: The Natural Diamond Market's Response

While consumers celebrate the arrival of an affordable alternative, traditional players in the diamond industry are facing a crisis. Many dealers and cutters holding large stocks of natural diamonds purchased at higher prices have had to drastically reduce their selling prices, leading to an erosion of profit margins. Those who were slow to adapt or ignored the trend have lost significant market share. Retail chains, from independent jewelers to global giants like Walmart, have not only included lab-grown diamonds in their offerings but are now aggressively promoting them as a smart choice. Some have even gone so far as to completely stop selling natural diamonds in certain price-sensitive categories. Even De Beers, the giant that controlled the market for centuries and built the myth of the eternity and pricelessness of the natural diamond, was forced to react. After initially rejecting and demonizing synthetic alternatives, De Beers launched its own brand of lab-grown diamonds, Lightbox, strategically positioning them as "fashion jewelry" rather than stones for important life occasions, in an attempt to protect the exclusivity of the natural stone. The strong pressure on the prices of natural diamonds is evident. After a brief rise during the pandemic, prices plummeted to a multi-year low, with a drop of over 34% from the peak recorded in 2022 to the end of 2024.

The Future of Value: Investment or Just Jewelry?

Forecasts for future prices are quite clear. Experts predict a further decline in the prices of lab-grown diamonds as production becomes more efficient and competition increases. As for natural diamonds, their pricing power, especially in standard commercial sizes and qualities, has been permanently undermined. The increasing presence of lab-grown diamonds in mass retail threatens the very perception of a diamond as the ultimate symbol of luxury and wealth. If a stone from Walmart looks identical to one from the most prestigious jewelers, the concept of exclusivity becomes difficult to sustain. However, as jeweler Leopold Macukić from the portal ctd.hr points out, a long-term counter-effect is also possible. "If the price of lab-grown diamonds continues to fall and they become ubiquitous, they could lose their status as a symbol of prestige. In such a scenario, buyers in search of true exclusivity and rarity might turn back to natural diamonds with full confidence. Their authenticity and the fact that they were created by nature would become their strongest asset and would restore their status as the ultimate luxury standard." The likely outcome is a divided, or bifurcated, market. On one hand, truly exceptional, rare, and certified natural diamonds—such as large, flawless, vividly colored, or historically significant specimens—will likely retain or even increase their value, treated like works of art. On the other hand, smaller and more common natural diamonds will continue to lose value as they have to compete directly with visually identical and significantly cheaper lab-grown alternatives. For consumers, this means they will likely enjoy even lower prices in the coming years, while those who own diamonds as a form of asset should significantly lower their expectations of value growth. The famous saying goes that a diamond is forever—but its value may no longer be.