The 18-karat yellow gold wristwatch is one of only three models to feature a black dial and diamond hour markers. Of those models, the Bao Dai is the only watch known to exist with diamonds at the even hours instead of the odd. The rock at 12 o'clock forced Rolex to move its trademark crown below the diamond, resulting in the only dial of its kind in the world.



Phillips likened demand for high-end collectible watches to that of fine art and vintage sports cars.



"The demand for such a rare collector's watch can be compared with the demand for a rare Ferrari convertible from the 1950s, a great painting, a great jewel," said Aurel Bacs, senior consultant for Phillips in association with Bacs & Russo.



"It is a work of art. It's part of what the 20th-century culture is made of. It's what we, mankind, jointly want to hold onto, and it would absolutely make sense to put it in a museum where the best of the best of the 20th century is reunited. It's really a landmark of the 20th-century industrial design."



The watch last sold in 2002 for a then-world record price of $235,000. The previous record for a Rolex sold at auction was held by the "Split-Seconds" reference 4113, sold by Phillips in 2016 for $2.5 million.



For more luxury timepieces check out CNBC's "Secret Lives of the Super Rich."