In another sign of real-world cryptocurrency functionality, Wave Financial announced the first purchase for their Wave Kentucky Whiskey 2020 Digital Fund. Shortened to WKW20, the fund will allow users to profit from vintage aging whiskey. The first purchase consisted of 1,000 barrels, although larger sums are expected as the fund expands in scope. While the ideal maturation time syncs with the 5-year aging period of the whiskey, investors will be able to cash out earlier. To facilitate this option, the fund will be tokenized using blockchain technology.
Whiskey appreciates in value as it ages, with the flavor becoming more complex and smoother over time. Investing in barreled whiskey is not a new phenomenon – but economy of scale can be difficult to achieve for the average investor. Once bottled, the whiskey will cease aging. Although individual bottles of whiskey can appreciate in value due to lowered supplies, barrels are the preferred holding. At a going rate of over $10,000, they are not a feasible investment vehicle for the average person.
The concept of tokenizing assets came about early in the lifecycle of cryptocurrency. At first, it applied mostly to precious metals and other assets traded alongside stocks. Over time, as cryptocurrency gained wider appeal in traditional markets, larger asset classes saw increased tokenization. Tokenized real estate has reached critical mass, with options emerging for smaller scale investors to realize profit from a market that otherwise requires a large initial investment.
While digital currencies and smart contracts are a key component of the cryptocurrency industry, tokenized assets may be the easiest for traditional investors to understand. Splitting major investments into smaller, more manageable chunks does not require a high level of technical expertise. If tokenized assets can set themselves apart from the occasionally seedy underbelly of the cryptocurrency sector, they stand a high chance of success.
About Wave Financial
While the WKW20 Fund is their most unique product, Wave Financial offers several investment vehicles beyond whiskey. Their Select 20 index fund features the top 20 cryptocurrencies by market cap – while excluding USD pegged coins and privacy coins. They exclude these coins to maintain regulatory compliance.
Additionally, they offer a BTC-focused yield fund that creates call options, where-in the premium passes through to investors via dividend. Through this process, they hope to mitigate the risk of pure BTC holding.
Article By: Adam Stone