Alternative Investments

International Energy Agency data shows that wind power accounts for 4% of global energy production. It is in Northern Europe that wind turbines contribute most to energy supply but the latest technology in the world of giant wind turbines means that the market is growing quickly. Technology advances also mean production prices have fallen significantly in recent years to reach efficiency levels that mean government subsidies are no longer necessary. This has led to new markets opening up as wind power reaches grid parity in windier locations in the USA, Asia and beyond.

For those who are doing some ‘New Year’ investment portfolio rebalancing for the year ahead, on asset class being tipped for a strong 2018 is gold. With interest rates rising, buying gold may seem counterintuitive as part of an ‘out with the old and in with the new’ reassessment of investment weightings.

With it having been almost impossible to avoid the news, most will probably be aware that cryptocurrency Bitcoin’s exchange value smashed through the $10,000 barrier last week. With previous ‘round number’ price levels being breached, having led to significant sell-offs as early investors looked to lock in profits, there was plenty of speculation what the result of the price hitting $10,000 would be. The answer was an acceleration in the buying frenzy taking Bitcoin past the $11,000 mark within a few hours.

Bitcoin this morning broke through the psychological $10,000 barrier for the first time as its price touched $10,379 during the Asia trading session. After the cryptocurrency surged to $9000 from $8000 in just seven days last week, as the current week began with the market’s eyes on $10,000. A surge in new accounts being opened on cryptocurrency exchanges as individuals investing online frantically looked to avoid missing out on price rises has been apparent. Coinbase, the largest cryptocurrency exchange in the USA, saw 100,000 new accounts opened between last Wednesday and Friday alone.

IPM, an FCA-regulated firm that approved the promotional materials advertising mini bonds to retail investors has been ordered by the financial regulator to immediately cease all regulated activity. The ban comes after 2 companies that issued mini bonds marketed through advertising approved by IPM collapsed, with investors losing at total of £15 million. £7 million worth of mini bonds were issued by Secured Energy Bonds, which failed in 2015, and £8 million by Providence Bonds, which similarly went under a year later in 2016.

The recent surge in popularity of investing online in cryptocurrencies as a speculative store of value is about to see a challenge from an old foe in new-tech guise. Last week Bitcoin’s surge in value continued as the dominant cryptocurrency’s value approached $8000. The latest value climb has been driven by the Chicago Mercantile Exchange (CME) announcement that it is seeking regulatory approval to begin offering Bitcoin futures. As the world’s largest futures and commodities exchange, CME’s move is being taken as a strong indication that Bitcoin is about to establish itself within mainstream financial markets, a development which is fortifying sentiment around its future prospects.

Danish pension funds are looking for alternative investments for better returns

Danish pension funds are looking for alternative investments for better returns at a time of low interest rates. PFA, Denmark’s largest commercial pension fund, will invest in infrastructure projects and unlisted companies.

Head of Bitcoin Foundation cautions people not to invest more than they can afford

As billions lack access to formal banking, mobile money is getting increasingly popular. In Africa, more users are taking to Bitcoin. It is getting particularly popular in Nigeria, South Africa and Kenya. The crypto currency has lot of potential in countries with volatile economies.

However, the head of Washington-based Bitcoin Foundation, Llews Claasen sounded a note of caution, urging people not to invest more than they can afford in the crypto currency. He was speaking at the TEDGlobal conference in Tanzania regarding the potential of Bitcoin in Africa. Bitcoin Foundation is a non-profit organisation that promotes the use of Bitcoin around the world. The crypto currency relies on blockchain, a digital technology that records every transaction.

Mr Claasen said,

“It offers people a chance to protect their savings from government abuse of monetary policy.

“A lot of people in Zimbabwe are interested in it as an alternative financial system, but that is not an easy thing to do formally as we don’t want to be perceived as wanting to disrupt economies,”

he told in an interview.

Read More: Investors are pouring thousands into rare whisky

He said that the tokenisation of crypto-currency could also have a big impact on Africa. Under tokenisation of crypto currency, rights to an asset are converted into a digital token on a blockchain.

“It means a small business owner can tokenise shares in his business so investors do not have to go through a central intermediary or register their shares.”

He said that it would make it easier for investors to put money in and take it out of businesses. However, he agreed that Bitcoin, in its present form, is not a great alternative to cash. But added that network upgrade would make mobile-based transactions easier. The upgrade would be done in the next six to twelve months.

“Currently the network has a transactional input of three to four transactions per second, which isn’t great if you want to use it as cash.

“But once the upgrade goes live, effectively there will be no limit to the transactions the network can handle.”

Recently, the value of one Bitcoin touched 4,500 (£3,470), the highest all-time value.

“To be honest Bitcoin is not a great form of cash right now. Don’t think of it as cash, think of it as a digital form of gold that enables you to save outside of the current financial climate,”

he said.

“They read an article about it which may or may not be true and make decisions about its long-term future, and that is why we have extreme swings,”

he said.

He said that in the future, there would be two currencies for everyone – one would be the local currency and the other would be the crypto currency. He dismissed an EU report sometime back that suggested misuse of the crypto currency in the form of tax evasion and money laundering. The report had cited the potential criminal use of bitcoin because of the anonymous nature of the blockchain-based currency.

“It found that there was not a lot of large-scale criminal behaviour,”

he said.

“Bitcoin is not completely anonymous and it is fairly easy for someone, say a revenue officer, to work backwards to find who was responsible for a transaction.”

Read More: Investment trusts preferred for in demand alternatives

Alternative asset classes are best accessed via investment trusts

The structure of alternative asset classes makes them best accessible through investment trusts, say portfolio managers.

David Hambidge, director of multi-asset funds at Premier Asset Management, explained:

Investors are investing huge money in rare whisky

Investors are pouring money in rare whisky and the value of old and rare whisky is touching record high prices. The market of old and rare whisky is seeing great investment. In the UK alone, bottles of Scotch broke a record high of £11.18 million ($14.34 million), which is a rise of 94% from the first half of 2016, said report. Out of the various types, a 50-year-old single malt brand, Macallan, was the most expensive Scotch sold in the first half of the year. It sold for £65,210 ($83,656), up from a previous high of £17,000 ($21,808) in 2015. Sale of Scotch to Asia grew has grown by 55 per cent in the last 12 months.