- Private Wealth
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As the market leader among decentralised digital currencies, Bitcoin has dominated news sites and blogs for some time – unsurprising given the explosive growth in its value, particularly between May and December last year.
Also in that time, there have been significant upturns in value of a number of other digital currencies; notably Etherium, Litecoin and Ripple have made headlines. It seems that cryptocurrency in general has become accepted by mainstream investors as much as by hedge funds and institutional investors, arguably all in part an effect of Bitcoin’s success.
However, against all of this is the apparent volatility of these new currencies. One argument propagated by a growing number of commentators is that the reason for the volatility is that any surges in price are being driven simply by a belief that values will continue to rise rather than anything more meaningful such as that cryptocurrencies could replace dollars and pounds.
This volatility was highlighted in mid-January when Bitcoin’s price fell to below $10,000 from a high in mid-December of nearly $20,000. Supporters say there have been many corrections throughout the high growth period and that investors should not lose faith; doubters argue this is indicative of a bubble and that whilst we may yet see more short term growth, further and even more precipitous crashes are likely to follow.
Against this backdrop it may be of comfort to more cautious investors that a new form of cryptocurrency is due to arrive in the EU this year, BrickCoin. As with many others, BrickCoin is rooted in blockchain technology, but what distinguishes it from the rest is that it is secured against real estate, which is comprehensive to regulators and accepted by many as a robust asset class. Technically it is a savings token, reinforced by highly-regulated and debt-free Real Estate Investment Trusts (REITs) – this is intended to mean high liquidity and regulatory protections, and provide some resistance against fluctuation, particularly in emerging markets.
Arguably the biggest advantage of BrickCoin is its aspiration to be fully regulated, consistent with compliance procedures and (more) resilient to inflation. Once BrickCoin becomes a fully regulated financial institution, its initial coin offering will take place.