I think the value of diamonds has always been their rarity and cost. Historically, for married women this allowed them some financial strength and safety net. Of course as time goes on that function becomes less useful, but the idea has still stuck around a bit.
I predict people will turn to other gemstones, or will stick to "natural" diamonds and maybe even get them certified and stuff, producing another artificial market to inflate their value.
Having inherited a stupidly large rock that had been in my family since 1905,I moved immediately to divest, and it wasn't in any way hard to sell, just really costly.
Even with step-up cost basis cancelling out huge capital gains, Sothebys bit off about 22% in commissions and fees for itself.
I also explored selling through an individual jeweler, and was offered 6 figures cash in a briefcase, but the commission would have been about the same, just more camouflaged, and I had no reason to want to explain a six-figures-of-cash deposit to my bank I'd have had to make thereafter.
Big high quality diamonds at least, are liquid these days. (Your link is from 1982!) Just expect considerable slippage when you sell, the inevitable middlemen have sharp teeth.
Diamonds are already certified by GIA, so that you prove their clarity and quality and such (which no untrained observer would be able to differentiate)
I mean, having something valuable as a safety net and then carrying it around day and night where it can get damaged or stolen doesn't really sound like the smartest thing.
I predict people will turn to other gemstones, or will stick to "natural" diamonds and maybe even get them certified and stuff, producing another artificial market to inflate their value.