Like the parent comment says, there will still be demand for high-quality diamonds whether or not they're considered a luxury. It's more that the marginal utility of a diamond has plummeted, compared to cheaper and easily mass-produced iPhones or Labubu dolls. Hardly surprising that diamonds are unpopular to a generation of Americans who are overwhelmingly unlikely to ever own a house.

It's not the 1950s anymore, and blue-collar workers don't want to piss away 3 months salary to buy a depreciating asset. It's really only marketable if you lie to the customer.