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Expensive whiskey has been a favorite for investors of all levels, from casual collectors to whiskey connoisseurs. However, it often required you to either hold individual bottles, or invest in the distilleries themselves. Building a robust portfolio of whiskey casks was simply unobtainable for most investors until today. Whisky investing is now easy because of online platforms.
What is Whiskey Investing?
Whiskey investing involves buying casks of whiskey such as bourbon or scotch and holding them for a specific amount of time. Since whiskey gets more valuable with age, rare whiskeys that have aged for years can become quite valuable.
However, whiskey investing can be difficult for the average investor. While some people choose to own bottles of expensive whiskey, it actually stops aging in the bottle. The only way to continue the aging process of the whiskey is in the cask. Buying casks of whiskey can be expensive and burdensome!
Thankfully, there are now platforms like CaskX that are allowing investors all over the world to invest in whiskey casks without physically owning the cask. This breaks down many of the traditional barriers for people trying to invest in whiskey casks.
Additionally you can buy stock in whiskey distilleries, such as Brown-Forman. However, this is a more indirect investment in whiskey.
How Does Whiskey Investing Work?
Whiskey investing has been a favorite alternative investment for many years, especially among the very wealthy. While there are many factors to take into account when investing in whiskey, the main value will be derived from that age of the spirit. As whiskey ages, it is generally accepted that it becomes tastier, and therefore more valuable.
It is important to know that whiskey stops aging once it is bottled. Unopened bottles of whiskey will not go bad, however the aging process is halted at bottling. This doesn’t mean that the value of the bottle will never go up, however. Many bottles of whiskey that were aged 20+ years will continue to appreciate in value.
Another important factor in determining whiskey value is the distillery that made the spirit. Worldwide there are a number of renowned whiskey distilleries that have been operating for hundreds of years. Every country has its own twist on whiskey, with distilleries in Scotland making a different type of whiskey than Canada or Japan.
When choosing a whiskey to invest in, all of the above must be taken into account.
How to Invest In Whiskey
There are a variety ways to invest in Whiskey. One of the most straightforward ways is to buy rare bottles of whiskey and hold on to them as they appreciate in value. Many local wine and liquor shops will have a rare whiskey section, which should have a variety of bottles available for purchase. Having rare whiskeys at home is a nice conversation starter, however it could become burdensome when investing thousands of dollars.
If you want to invest closer to the actual production of the whiskey, then you would need to invest in whiskey casks. However, whiskey cask investing is difficult for individual investors to break into; it requires a personal network of distilleries in order to have access to purchasing casks.
Today, there are online platforms that offer curated “portfolios” of rare bourbon, scotch, and other whiskeys available to invest in. CaskX is one of the largest platforms offering direct whiskey investing. While only available to accredited investors, those who are accepted are granted access to CaskX’s extensive distillery network to make investments in bourbon and scotch barrels. After investing, CaskX will hold the barrel itself for you. This is the easiest way to invest in whiskey on a large scale.
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Best Whiskey Bottles to Invest In
When choosing to invest in whiskey, it is important to understand which bottles are more valuable, and why. There are a few factors that determine a whiskey’s value, the most important being the age of the whiskey, but also the type of whiskey (scotch vs bourbon), and the distillery.
As it stands right now, these are the most expensive bottles of whiskey you can buy today.
- Black Bowmore 1964 Distillation– This famously rare bottle of black whiskey currently sells for between $24,000 and $45,000 a bottle! Distilled in 1964, it was bottled in 1993 and cost only $100 at the time. This massive increase in price is a great example of the potential of whiskey investing.
- Old Rip Van Winkle 25 Year Old Bourbon– This American whiskey is another classic among collectors. Distilled for 25 years from 1989 to 2014, only 710 bottles were made of this whiskey. It also boasts a 50% alcohol content. However, it is one of the priciest bottles with prices upwards of $56,000.
- Johnnie Walker Blue Label ‘Ghost and Rare’ Port Ellen– This blended whiskey is a combination of a malt from Port Ellen, which is a ‘ghost distillery’ (it closed in the 1980s), and other rare reserves. Unlike the others, this bottle is perfect for entry level whiskey investors with a price around $500 per bottle.
- Suntory Hibiki 21 Year Old– Japanese whiskey is quickly becoming a worldwide favorite, and Hibiki is proof of that. Winner of the World Whiskey Awards in 2017, a bottle of Hibiki will cost about $1,300 in 2023. For those looking to diversify their whiskey collection with blends from around the world, Hibiki is an excellent choice.
Is Whiskey Investing Worth It?
For investors that are interested in whiskey and collecting rare spirits, whiskey investing could be worth it. Whiskey bottles have seen consistently high returns over the past decade. The RW Apex 1000, which is an index of the price of 1000 of the rarest whiskey bottles, is up for 450% since 2012. In fact, while stocks, bonds, and crypto saw record losses during 2022, the Apex 1000 was up nearly 10%.
For some, however, finding the right whiskey bottles to invest in can be difficult. Often times rare bottles are difficult to purchase, and they must be stored. Also, whiskey bottles are not very liquid. It may be difficult to find a buyer for a rare bottle of whiskey should you want to realize the return on your investment.
Thankfully, there are platforms like CaskX that have made whiskey investing smoother and more liquid. While only available to accredited investors, those that want to explore investing in whiskey on a larger scale should start here.
Alternatives to Whiskey Investing
While whiskey investing can offer consistent long-term returns, there are alternatives, specifically with different rare spirits.
- Wine Investing is one of the most popular forms of rare drink investing. While buying rare bottles of wine is relatively accessible, there are now digital platforms available that allow you to own the bottle without having to store it. This allows you to buy and sell wine on a liquid marketplace.
- Gin Investing is a quickly gaining popularity as another form of rare spirits investing. While not nearly as popular as wine and whiskey, gin is a growing drink globally and investment opportunities are starting to pop up. Highclere Castle, a gin company, just closed a public fundraising round for investors to have a stake in their newest bottle of gin.
In all, whiskey investing is a great and fun way to diversify your assets. While many investors would prefer to hold the physical bottles themselves, there are more opportunities than ever to start building a portfolio of whiskey online.