Lumber is down 35% since crypto started trading it

The price of lumber has declined 35% since crypto exchanges first listed crypto-native lumber contracts for trading.

At the time, using blockchain technologies to tokenize, trade, or track an off-blockchain commodity seemed like a welcome revolution.

The price of lumber, in early 2021 during the COVID housing boom, had been rallying amid soaring demand for home renovation projects and limited supply from quarantined workers and broken supply chains.

FTX launched its lumber future on May 6, 2021. Since then, the USD price of lumber has fallen 34.9%, and that decline would be even worse using inflation-adjusted numbers after deteriorating in purchasing power over half a decade.

Protos reported roughly $23 million in lumber trading on FTX during its first several days.

The Bureau of Labor Statistics’ seasonally-adjusted lumber index shows 455.4 in May 2021, the series’ peak, compared with 296.4 in July 2026.

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Lumber, another dumb crypto fad

In reality, lumber is a broad category within which there are thousands of distinct prices depending on the type, quality, and location of the particular wood.

Cash quotes vary by species, grade, dimensions, delivery point, and a variety of other factors.

CME has also changed its futures contract in August 2022 with a sunset period that ended in May 2023.

Its legacy, so-called “Random Length Lumber” future covered 110,000 board feet and sourced delivery from western mills.

Its replacement contract now covers 27,500 board feet, delivers to Chicago, and began trading on August 8, 2022.

The exchange delisted the old contract in May 2023 after a sunsetting process. Therefore, a continuous chart that “stitches” the differently sized contracts together crosses a genuine specification break.

Both contracts neatly quote, however, in US dollars per 1,000 board feet, so their shared dimensions can allow technicians to create an apples-to-apples, albeit stitched, chart of lumber prices over time.

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