By GUY TREBAY

Every diamond is a story as old as the earth and will outlast us all. Diamonds are, indeed, forever, but they are not forever in view.

For more than a half-century, the whereabouts of one of the world’s most celebrated diamonds, the fabled Wittelsbach blue, was obscure. Every person with knowledge of great gems was likely to be familiar with the stone: A grayish blue diamond taken to Europe in the 17th century from India, it was given in 1664 to the Infanta Margarita Teresa by her father, the king of Spain, eventually becoming a fixture of both the Austrian and Bavarian crown jewels. In 1964 the stone passed into private hands, and afterward its whereabouts had been a mystery.

In December 2008, the Wittelsbach blue suddenly turned up at auction, the centerpiece of Christie’s London sale of important gems. Expected to fetch $15 million, the cushion cut stone, described as a fancy deep grayish blue, was fought over by rival diamond dealers and hammered down in a matter of minutes for the extraordinary price of $24.3 million - the most ever paid for a diamond at auction and a sum that may also have rendered the Wittelsbach blue, by weight, the most valuable commodity on earth.

The buyer was Laurence Graff, the billionaire diamond dealer who made a series of startling decisions about the stone. First, he had it recut, reducing it from 35.52 to just over 31 carats, to eliminate the chips and “bruises” inevitable in a stone of its age but also to improve its clarity, brilliance and grade. Then he renamed it the Wittelsbach-Graff and struck an agreement with the Smithsonian Institution in Washington to display it.

Beginning January 28, it will be on view alongside the legendary Hope, a larger stone but a slightly more drab one .

By recutting the diamond, some critics suggest, Mr. Graff has not so much improved it as altered it out of all recognition.

“That stone has a pedigree that is incomparable,” Daniela Mascetti, a senior global specialist in jewelry at Sotheby’s, said by phone from London. “The provenance of a gem is important in ways that are not true of other things. With the Wittelsbach blue, you knew how it came into existence and in a rather exciting way. You know who has worn it, what kinds of historical events it has gone through and what social upheavals it was present for.”

Like the Hope, the Wittelsbach is thought to have originated in India, at the Golconda mines, and was also likely to have been brought to the West by Jean-Baptiste Tavernier, the 17th-century traveler and trader.

“The stone is heavily chipped around the edges,” Mr. Graff said . “The stone was cut in the 1600s. I think we know more about polishing diamonds today. It will come back to the market as a more beautiful stone.”

By refashioning the stone, Mr. Graff undoubtedly improved its value in a market that has seen the prices of colored diamonds soar over the last decade, so much so that a 5-carat vivid pink diamond his company sold for $3.8 million in 2007 last month brought $10.8 million at a Hong Kong auction.

Yet, as Ms. Mascetti said: “In a way, it is a shame to have altered what has been preserved for so many years. Do you still have the original stone found by Tavernier or cut in his time? Will that stone still be the Wittelsbach? In my opinion, it’s not.”

The Wittelsbach diamond (shown in 2008) was part of the dowry for the Infanta Margarita Teresa in 1664. / CHRISTIE’S