Modern breeding
By the 1980s, popularity of the Arabian horse had risen to unsustainable heights. Arabians became a popular status symbol for celebrities and other wealthy people, many of whom were inexperienced with horses and considered them "living art."Prices skyrocketed, especially in the United States, with a record-setting public auction price for a mare named NH Love Potion, who sold for $2.55 million in 1984, and the largest syndication in history for an Arabian stallion, Padron, at $11,000,000. The potential for profit led to over-breeding of the Arabian.
When the Tax Reform Act of 1986 closed the tax-sheltering "passive investment" loophole, limiting the use of horse farms as tax shelters, the Arabian market was particularly vulnerable due to over-saturation and artificially inflated prices, and thus it collapsed, forcing many breeders into bankruptcy and sending many purebred Arabians to slaughter.
Prices recovered slowly, with many breeders moving away from producing "living art" and towards a horse more suitable for amateur owners in many different riding disciplines. Today, the vast majority of Arabian horses are owned for recreational riding purposes.