Bitcoin Forum

Hi,

I'm looking to get some feedback from the community here if possible please.

My business builds fine wine investment portfolios for private individuals. I want to explore the idea of accepting Bitcoins as payment for fine wine (currently we only accept fiat currency). The idea is to provide a way to hedge against the fluctuations in the crypto currency prices and/or provide a way to convert BTC into fiat currency. If it is to go ahead it would all be transacted through the main company (opened in 2009).

Added some more information to our main website here http://apmwineinvestment.co.uk/paywithbitcoin/
 (http://apmwineinvestment.co.uk/paywithbitcoin/)

Updated FAQ's

Is this for real? - Yep, we were established in 2009 and all details on our company can be found on our website. We operate an open door policy and love to meet clients.

What do you need from me? - The minimum we need is a name and an email address to setup you wine storage account. We require no KYC from you to buy or sell wine.

Do I have to over 18 to buy? - ‘Frad so, we are selling alcohol so you will need to be 18+

What information will you require from me? - To set up your storage account the minimum we need is a name and an email address. If you wish you can move the wine to another bonded warehouse anomalously but if you instruct the wine to be sold then we will need your bank account details to remit funds. All information you provide is for internal use only and is not shared with any third party.  

What is you minimum order? - Currently our minimum order is 1.5 Bitcoins.

How do you calculate the price into Bitcoins? - Once you decide how many Bitcoins you want to spend, we will build a portfolio in fine wine to match that value. The exact price is then calculated at the time you are invoiced. This is done by taking the live bid price from an exchange with enough volume to convert into fiat immediately. Payment is required upon receipt of invoice. A receipt will be sent once Bitcoins are received.

Few bullet points below but any feedback would be greatly appreciated.

Why buy fine wine with bitcoin?

• Exposure to an asset with capital growth that's exempt from capital gains tax and income tax.(UK).
• Lower your risk exposure to crypto currencies by diversifying into a tangible asset.
• Fine wine can be used as a store of wealth.
• Fine wine remains in the UK bonded system, it can be traded on the international market and can be sold in any country.
• Wine can be liquidated and funds remitted via bank transfer instantly and globally.
• No KYC or tax reporting requirements imposed when selling fine wine on behalf of our clients.
• No minimum hold times, wine can be liquidated immediately.

You've just opened a whole new world for me. I genuinely had no idea that wine portfolios were a thing.
I take it that these bottles are stored in optimal conditions and not in private home collections? I've got quite a few old bottles but unfortunately I have no way of telling whether they've spoiled or not. Can the wines be claimed and delivered so that they can be consumed too or is it solely a marketplace that facilitates the trade as a commodity?

Investing in wine has been around for quite a while. In simple terms we are a stock broker, but instead of stocks and share we use fine wine (it's more fun than stocks). Clients buy unopened cases of top fine wine and store it in a government bonded warehouse system, this also ensure they are stored in optimum conditions. Produced in limited quantities, over time these wines get consumed therefor getting rarer, and therefor the price goes up. Technically the wine belongs to the clients and they buy for investment but they can pull it out of bond to drink if they wish.

I used to mine crypto coins and converted them to BTC, had a nice amount in the end but had them stored with Mt Gox and Cryptsy so you can guess what happened there..... :(  

Back then I was looking for a way to convert them into fiat currency or find something to invest them into. Didn't find a lot of good options so wondered if other people might be looking for the same thing. With wine you can invest into a low risk store of wealth or just buy wine and then sell it for $/£'s. I'm trying to see if there is any appetite to do so thus my original post.

Feel free to let me know what bottles you have, happy to let you know if they are valuable.

Sounds interesting.

Just to clarify - If I am a UK resident and I buy the wine with BTC and it remains in the bonded warehouse and then I choose to sell it for GBP at a later date there is no capital gains tax or income tax to pay on the profit?

Can I move the wine to another bonded warehouse in a different country?

That’s correct, when the wine is sold (we of course can do this for you) there is no capital gains tax or income tax payable. As wine is bought and sold in bond there is no VAT or Duty as well.

You can send the wine to any country via bond transfer but only do this if you plan on drinking it. You will generally get a better price selling here in the UK and we can remit funds internationally if needed.

presumably yr still liable for capital gains on any BTC/Altcoin gains that u may have made with the coins used to buy the wine!?

I think that is debatable - I just had a look how HMRC deal with bitcoin and the interesting thing is this
"If a transaction is considered speculative, it may not be liable to tax at all."

https://www.taxation.co.uk/Articles/2015/03/10/332784/cryptic-currency

Considering you are speculating on the fine wine then the answer appears to be no you are not liable.
Otherwise, if it is not speculative then you are liable for capital gains.

Are these based in the US? I see someone from the UK

We are based in London, UK. We do however have clients in the USA, India and Asia though. The wine is physically stored in a government bond just outside of London.

Its sold from London and then funds are sent via bank transfer and that can be an international payment if needed.

copy the onegram approach. You can create a coin backed by copy the onegram approach. You can create a coin backed by wine, then sell that. You can spread the coins across the wines, or on select bottles so individuals can own 0.00001% of the wine. Then when you sell either the coin or the wine(and reduce the coin by the appropriate amount ala tether) you can return the value. note in the UK you can exchange bitcoin for gold sovereigns which are fiat.

Be very careful about accepting US clients though especially with recent SEC rules.

How do you currently deal with US customers? Being that its an investment and they are getting a return. You promising a return?

Maecenas is trying to do the same thing with fine art.  https://www.maecenas.co/

Wine scares the shit out of me... there are a lot of fakes in the market.

Bourbon is cool.  I was just having a conversation about a bottle of Black Maple Hill that sells for $3800 in the UK and $2500 in America.

I'm selling off some of my collection. https://bitcointalk.org/index.php?topic=2350633.msg23955158#msg23955158 (https://bitcointalk.org/index.php?topic=2350633.msg23955158#msg23955158)

Any interest in bourbon?

Hi 2342q6tegw, we looked at this approach but decided against it. Not that it's a bad idea, it's just not suitable for us.

 
51attack, We do accept US clients, whilst there is no UK tax issues when you sell the wine (VAT, duty, capital gains tax) I can't give you a firm answer on what tax implications have been triggered (if any) when you convert Bitcoin to wine. Every country has different views on the matter.

UK has this to say. https://www.gov.uk/government/publications/revenue-and-customs-brief-9-2014-bitcoin-and-other-cryptocurrencies/revenue-and-customs-brief-9-2014-bitcoin-and-other-cryptocurrencies

If you use Bitcoin to buy something in the UK then there is normally VAT due. But when you buy and sell wine in bond there is no VAT. Wine is a tax efficient investment. We of course cannot guarantee a return on wine but traditionally wine has performed very well against other asset classes. (see chart on http://apmwineinvestment.co.uk/paywithbitcoin ).

BayAreaCoins, you are right about the fakes, when China started to buy fine wine they started to produce large amounts of counterfeits. We only sell and buy wine that has remained in the UK bonded system all its life. We won’t touch wine that has been removed from bond. This way we can guarantee the authenticity and the provenance of the wine.  

AmphoraWines Any particular reason it is not suitable for you? Do you know anyone (competitors? or other esoteric investment companies who might be interested?Vintage Cars?,Fine art?Antiques?)

Whilst it's a good idea, its a matter of regulation here in the UK. If multiple people own a stake or a share in an investment it becomes a "collective investment scheme" and therefore needs to be regulated.  Perhaps worth looking at in the future though.

I wonder how http://therealasset.co.uk/gold-investment-products/gold-backed-crypto/ in the UK licensing works. Obvious ways (well perhaps not for your benefit ) are to target Irish, Swiss, Singapore, Aussie,Dubai versions of your company. Also to try and run as an e-money issued backed by the asset class. Not sure how redemption plays with that collective investment scheme though. Can think of a few possible ways. This is quite similar to something I'm working o So am quite interested the technology can always be licensed to friendlier jurisdictions so glad to see there is no major showstopper.

I think this is a good idea.  You should go for it!

When selling the wine can the funds be returned in BTC?

First of all when we want to change our bitcoin to cash we invest in many ways of trade but using fine wine is the best idea.

When the wine has been sold we can either remit funds to a bank account (UK or international) or we can exchange funds back into Bitcoin and remit to a wallet.
 
We want to be as flexible as possible so both options are available.  You might even decide you would rather have some of the wine sent to you instead.

The reason why I was asking, is that if you are providing a return on someone investing, there maybe some legalities with the SEC. Even if you are in the UK, if you accept US customers, the US could still knock on your door. :(

Similar to the way ICOs are locking out United states citizens. Because they fear repercussions.

I think the idea of investing in wine using the blockchain is very interesting and doable. I know there are those gold backed cryptos.

I guess you'd just have to consider which was going to increase in value more over the length of the planned investment, wine or BTC. Unless you just want to drink it, which seems like a pretty good plan.

51attack, all good points. technically clients are buying physical cases of wine and storing them in perfect conditions. The fact they tend to appreciate in value as they get consumed reducing the original finite supply is a benefit but we never sell wine with a guarantee of return.

If a customer wants to drink the wine then of course that is their prerogative but they may also chose to sell it at a later date if they so wish.

US customers are of course subject to local tax rules and regulations.


DaveMallettJSE. I think its safe to say that BTC will fluctuate much more than the fine wine prices. I would even go as far as saying the % return on BTC will outperform most other asset classes. The idea that we are proposing is giving people the opportunity to not have "all eggs in one basket" and diversify to mitigate the risk. Converting some of your BTC into fine wine does exactly this. It provides you with a store of wealth and the potential for capital gains. And of course the option to drink it if you so wish  :)

I see the model now. Very good!

Thanks 51attack, I've had quite a bit of interest and lots of questions so will get an FAQ section up on the website over the next day or so.

How long does the transaction take to purchase the wine and what are the costs of moving it to another bonded warehouse?

The transaction is instant, once we send an invoice priced in Bitcoins and payment is received then you become the legal owner of the wines.

If you wanted to move wine from one bond to another then it costs around £15. Do you already hold wine in bond as we can certainly send it to your account if needed.

Updated the first post with some FAQ's

I'll have to dig into getting a wine bond when I wake up.

We set clients up with an account at Vine, its one of the best UK bonds available. https://www.liv-ex.com/staticPageContent.do?pageKey=About_Vine

We don't insist on clients having to store there but we do pay for the storage and insurance if you do.

With the price of Bitcoin being so high we are seeing a lot of large holders decide to cash out and take some profit.

Whilst there has not been a correction in the Bitcoin price there is certainly talk of it. What do people reckon? Will we see it correct or will it continue to climb?

So, seems the day I posted the above asking if there was going to be a correction the market fell from just over $19,000 to sub $12,000.  Interestingly we have seen a large spike in demand for our service as people realise the Bitcoin price behaves like any other market and the price can come down as well as up. 

If you are interested in converting BTC to Fiat through Fine Wine please email me at james@amphora.london



 

As a follow up to our last comment. The guys who bought fine wine with Bitcoin when it was over 10k a coin are rather happy right now. Some are now selling their wine saying they will buy back Bitcoin at just over $5k a coin.

Use PundiX or just make a Token on Wavesplatform that equels to usd.

Still here, still accepting Bitcoin.