Bitcoins offer a savings choice

Bitcoin valued are edging towards $1,000 each.
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Bitcoin valued are edging towards $1,000 each.

Kiwi bitcoin firm MyBitcoinSaver has been invited to apply to one of the world's top business accelerators - Techstars.

The 18-month-old start-up, formed out of the business software company Webscope, has ambitions to be a global financial technology force by giving people the chance to save into the cryptocurrency rather than into a KiwiSaver or regular bank account.

Now, Auckland-based founders Sam Blackmore, Katie Graham and Tim Clark are hoping to be accepted into the special Tel Aviv incubator which has partnered with the UK's Barclays Bank to offer young companies access to international mentors and investors. Only ten companies globally are invited into the incubator out of 300 applications.

Sam Blackmore (left) and Katie Graham, co-founders of MyBitcoinSaver.co.nz, a Bitcoin savings company based in Auckland.
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Sam Blackmore (left) and Katie Graham, co-founders of MyBitcoinSaver.co.nz, a Bitcoin savings company based in Auckland.

Sam Blackmore said Bitcoin was attractive because it was both a commodity and a currency. He said investors had saved $100,000 into Bitcoin since the company started 18 months ago. But that number had already increased to more than $200,000 because of rising Bitcoin values.

READ MORE: A beginner's guide to bitcoin: What you need to know

"Savers can invest weekly, fortnightly or monthly," said Blackmore. "We adopt a dollar cost averaging approach. Savers don't benefit as much as if they had invested a lump sum, but they also spread their risk."

Bitcoins rose in value this week in the wake of the shock US election result as investors raced into assets considered to be safe havens for their money outside of stock and shares.

The digital currency jumped to a high of $738 ($1023) in America on Tuesday night and was trading at around $710 ($985) by the end of the week.

There are currently 21 million Bitcoins in circulation, with release of them controlled by a mathematical algorithm operated from the US.

 "It fits the interconnected digital lifestyle," said Blackmore. Savers can set up a direct debit to save into the currency each month, and the firm then buys Bitcoins on the currency's special exchange.

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"Bitcoins once could be bought for $10 but now they are worth around $1000 each. The beauty of it is that it is divisible to eight decimal places and this allows savers to buy them with regular deposits."

Bitcoin trading means that around 20 per cent of investment will be used up by transfer, exchange and trading fees.

Blackmore added: "People are getting low interest rates on their savings and our business is offering them a chance to diversify. The beauty is that Bitcoin is geo-politically independent. Chinese investors are buying lots of bitcoins for example, because the Yuan is being devalued."

To supporters of Bitcoin, the exchange rises during political uncertainty are validation that the currency is being taken seriously as an asset and a haven at times of market volatility.

The national railway of Switzerland began selling bitcoins from its ticket machines on Friday and the currency has been made exempt from value added tax (VAT)  Luzius Meisser, President of Bitcoin Association Switzerland said: "Bitcoin is a currency, and thus should also be treated like a currency."

Blackmore said MyBitcoinSaver would soon have a financial partner in place to help grow its business into making payments and expansion in the UK. 

 

 

 

 

   

 

 

 - Sunday Star Times

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