The growing demand on alternative assets has been dragging rare scotch whisky as one of the ace players in recent years. finews.asia interviewed Benjamin Twoon, co-founder and CCO of the alternative assets exchange Alta.
In the midst of poor investment returns in mainstream assets, rare whisky recorded the highest return in the last ten years with 320 percent of growth, according to Knight Frank report. The trend may not stop here, Benjamin Twoon, co-founder and CCO of Alta, believes the price of whisky will still grow further.
However, whisky’s price growth may not be as fast as before. «Whether people will be buying as aggressively, whether people will still be investing as aggressively, is a big question,» Twoon said.
Consumer Surplus
When the market starts moving prices to $20,000 per bottle or $240,000 for two bottles, there is no more consumer surplus. «Today, with $100,000 a bottle… nobody's going to be drinking this,» he continued.
Meanwhile, from the investment perspective, investors will need the other parties to buy it for exit liquidity. When the market aggressiveness is not as high as before, it may take longer to sell.
Beyond Just Buying Whisky
Despite all of those questions, Twoon remains optimistic that some market players will still continue to have whisky as an investment asset. At the same time, the luxury companies will keep selling it.
«It's never about just buying whisky, you're buying experience, status, prestige, scarcity, a piece of history, buying whatever they want…So, the short answer is the price will rise,» he said.
Today’s Market is Asia
Whisky may not be a native Asian beverage but the region is the biggest market for spirits today. Taiwan leads the market, while Singapore is very close in the second rank for both scotch and whisky in general.
The low value-added tax rate for luxury goods in both countries is the main reason for it, according to Twoon. «We speak to cask brokers…they wouldn't go anywhere else in the world right now,» he added.
Tokenized Whisky
With all these interests in investment, tokenization is needed for the security of whisky, Twoon said. Alta started its tokenized whisky trading in 2021, and it now has over $1.7 million in volume traded in the whisky token. Meanwhile, the total number of orders from accredited investors stands at 214.
Alta also records a lot of bid activities but less in ask or selling activities. This indicates the rising interest in investing in whisky tokens as a security and holding it for the long term.
One Million Investors
Now, there are more than one million investors in Alta’s platform including those through member firms such as PhilipCapital and PrimePartners. The whisky tokens are issued by PrimePartners, who purchased the rare casks from Diageo.
«They [investors] anticipate the value of whisky to grow and earn better returns on their investments in the coming years,» Twoon added.