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You are reading Isaac Sotillos, guest of honor in our blog and author of tuwhisky.com
When we think of whiskey, we usually think of very concrete ideas: meetings of men in suits, incognito secret agent in luxury casinos, yachts moored on heavenly beaches, … that kind of thing.
Maybe the last thing that reminds us of the whiskey idea is crypto currency, right? Well, in 2020 and 2021, whiskey (yes, yes, whiskey) has become one of the top assets when supporting cryptocurrencies.
In this article I want to analyse recent examples where whisky plays a key role in cryptocurrency construction, acting normally as a reserve resource. Finally, I will finish by briefly analyzing the qualities of whisky as a resource that can be tokenized or used as a reserve for cryptocurrencies, so that you can evaluate the pros and cons by yourself.
Last September, a fund of Wave Financial Group announced the purchase of 1,000 barrels of bourbon whisky.
The investment in these barrels, via tokenization, promises to 5 to 6 years profit, period during which whisky ages in barrels and undergoes a revaluation that it was impossible to offer investors before the advent of blockchain technology.
Society expects every barrel to increase its value about 3,000 USD during this period. Such investment is part of a more ambitious strategy, started during the summer and which I will talk about below.
Kentucky Whisky Digital Fund
On 11 July this year, the aforementioned Wave Financial Group announced that it will launch, along with NEM Group Ltd., a token called Kentucky Whisky Digital Fund by the end of 2020.
NEM, is the development company of blockchain Symbol platform. They launched their token in 2015, which usually stands among the top 50 of capitalization on the cryptocurrency market. Currently, it is estimated that its capitalisation is approximately 431 million de dólares.
Entrambe le entità sono state associate con la celebre Distillery Wilderness Trail, and will launch a fund for the value of one year production of the distillery: about 25,000 barrels of bourbon 2020. This will allow interested investors selling tokens guaranteed by resources linked to an annual inventory of four million bottles.
The objective is to obtain returns through strategic sale of barrels throughout the useful life of the fund. Therefore, the managers of the Digital Fund estimate that can obtain a IRR (Internal Rate of Return) del 20% for the next six years. It’s not bad, is it?
CaskCoin, The cryptocurrency of Scotch Whisky
Finally, we have the example of Caskcoin, a Scottish cryptocurrency supported by scotch whisky aged. This whisky is mainly composed of a selection of Single Malts that have matured from 25 to 50 years. It is an exclusive and highly sought after malt whisky. Many of them reach high auction prices and come from all regions of Scotland.
The company defends on its site the goodness of Scotch whisky as a product of great commercial projection: it represents nothing less than a quarter of UK exports on food and drink; employs directly and indirectly more than 9,000 people; and exports annually more than 1.2 billion bottles, which reach more than 180 countries.
These are undoubtedly staggering numbers. But is the trust you receive as a reserve resource justified? To answer this question you need to take a closer look at the whiskey.
Cryptocurrencies and Whiskey, the (not so much) strange couple
Ci sono diverse caratteristiche intrinseche del whisky come risorsa che sembrano renderlo particolarmente interessante per il supporto delle criptovalute..
As in the case of physical currencies during the gold standard, have as support of their own currency a scarce good and perceived as high value by the public is something very interesting. Whisky, in particular aged whisky, has both characteristics.
But it’s not just aged whiskey that offers interesting options. As young whiskey matures year after year in its cask, its market price increases dramatically. The problem is that there was no way that the investor could access this revaluation … until cryptocurrencies emerged. This new way of investing makes it possible to purchase tokens supported by such whiskey, offering investors high profit expectations with all the security offered by blockchain technology.
In other words, investing in whisky can offer activities in support of a scarce, high-value physical asset that can be revalued for decades as it ages and the consumption of lots of similar age makes it increasingly weaker.
Consequently, the use of whisky as a reserve asset shows enormous potential. It is an alternative to all activities called SWAG: acronym of Silver, Wine, Art, Gold (Silver, Wine, Art and Gold)
However, unlike gold, silver and works of art, whisky is a fungible good that disappears once consumed, increasing its value. It is also preferable to wine, as its “life expectancy” is much longer.
Finally, whisky as a reserve resource for tokens and cryptocurrencies is on track to become a more than interesting option for the immediate future. You should give it attention.