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Property & Finance

MARKETS: Let’s talk about Bitcoin



Crypto is everywhere, the marmite of the investing world.

You need to have an opinion on Crypto these days if you want to avoid being an outcast. Nobody wants to be the one being shunned at the water cooler. Not having a two-sentence quip on Crypto puts you in the same bracket as those lunatics following soccer who say, “Na, I don’t really support any team; I just like to watch”. These are people you can’t be seen to affiliate with.

After 2017, we saw the crypto winter, where the entire space fell nearly 90%. Again, in March 2020, we saw Bitcoin lose half its value over a two-day period and most recently, we have witnessed the crypto world crash once again as Bitcoin fell from highs of $65,000 to $30,000 a coin.

There are multiple reasons for the most recent sell-off. China banned the use of cryptocurrencies for financial institutions. Other countries might be considering tighter regulation, particularly as cryptos become the currency of choice for ransomware hackers. Tesla stopped accepting Bitcoin as payment for vehicles, and Binance, a popular crypto exchange, is currently under probe by the US justice department and the IRS. All valid reasons for concern. Now investors fear that there is no telling when the selling might stop, given that there is no true intrinsic value in the crypto space.

My opinion: there are too many investors willing to buy it at a price far above $0 for this ‘going to zero’ argument to make sense. Not every financial asset will hold tangible intrinsic value. Take gold for instance, a 10 Trillion-dollar market built on socially constructed value; the belief that this will be worth more in the future than it is today.

My bull case for Bitcoin is probably somewhat different to the Bitcoin Ultras of the world. The Bitcoin true believers will tell you that it’s more than an asset. It is the only monetary asset that survives and thrives – the cockroach in the financial nuclear winter of money printing, societal collapse and Government intrusion.

Don’t get me wrong, the narrative is very compelling in a ‘rage against the machine’ sort of way but I fail to see any possible scenario where we all move to a decentralized world of the people, where governments politely step aside and the entire financial system as we know it dissolves.

But just because I am not entirely sold on the most bullish Bitcoin scenarios doesn’t mean that I see no utility. I believe Bitcoin is a truly amazing breakthrough for the financial architecture of the world that will see more and more adaption from the institutional players in the years ahead.

You now have large investment banks like Citi Bank coming out as bullish on Bitcoin, Invesco setting up crypto custodian arms and the likes of PayPal setting up wallets. The more this happens the more you will see the real institutional money being pushed into this space. The recent market environment has function as a catalyst for change. High equity valuations and limited upside in bonds are forcing investors to look deeper into the potential of alternative asset classes such as Bitcoin.

In short, there is undoubtedly some significant regulatory hurdles ahead, and the ‘Bitcoin as a currency replacement’ argument still seems far-fetched to me. With that said, I believe it is a financial asset that is here to stay; continued adaption from the institutional space could well see demand run higher, but don’t be fooled. Bitcoin is a speculative asset that will see mind-boggling volatility for some time to come. If you are looking to invest in the crypto space, do your research, start small and Hold on for Dear Life (H.O.D.L.)

Property & Finance

Guidance for reopening your business



By John Healy of Healy Insurances

It is heartening to see so many businesses reopen in recent weeks. I hope that the progress can continue so that we see the remaining hospitality businesses back in action shortly.

While there is a raft of information from Government and HSE sources, this week I will briefly outline some items to remember from an insurance perspective.

Contact your insurance advisor before you reopen: You may have reduced cover on your property or liability cover over the closure period and it is important to update this prior to opening your doors. Remember you may have staff on site in advance of reopening so it is vital that your policy covers them.
Review your Health and Safety Statement. This should be a living document and be available to review as needs be. Your COVID-19 safety measures should be included and all employees should sign that they have read and understand the statement.

Obtain Return to Work forms: Before any of the team return to work they will need to complete a return to work form and partake in any necessary training. These documents can be found at

Outdoor seating: If you are planning outdoor seating on public owned areas you will need to obtain a permit from Kerry County Council and your insurance policy will need to issue a specific indemnity to the Council. The Council will also require a minimum limit of indemnity of €6.5 million, which is standard practice for all State bodies. If this is your first time undertaking outdoor hospitality then you should include this in your Health and Safety Statement and do a full risk assessment.

Water systems: Put in place control measures to avoid the potential for legionnaire’s disease before your premises reopens.

Inspect plant and equipment: This includes lifts, ventilation and kitchen duct systems and generators. Ensure that your inspection certificates are up to date for any lifting plant including passenger and goods lifts.
Identify and display appropriate warning and safety signage for your premises.

Cleaning: Arrange the appropriate cleaning of your buildings and contents. External cleaning contractors should provide you with a method statement, proof of insurance and when finished written confirmation that the cleaning has been completed to the agreed standard.

The above is not exhaustive but there is a wealth of information available on and for reopening. Finally, the very best of luck to all the hospitality businesses getting back to what they do best. All we need now is that heatwave!

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Property & Finance

From November all homes will be revalued



By Ted Healy of DNG TED HEALY

The property talk over the course of the past week has revolved around the recent announcements relating to property tax.

The Local Property Tax (LPT) is an annual self-assessed tax charged on the market value of all residential properties in Ireland. It came into effect on July 1, 2013 and is collected by the Revenue Commissioners.

Under plans announced at Cabinet this week, homes built after 2013 will now face inclusion in the Local Property Tax.

Up until now the Local Property Tax was levied on property valuations from May 1, 2013. Homes that were built since that date have so far not been liable to the tax as they do not have a valuation dating from then.

This is now about to change which will bring approximately 100,000 homes into the Property Tax net. The new valuation date is to be November of this year with every home in the country liable for the tax by 2022.

It has been reported that 60% of home owners will not be paying any more than they already do, while 10% will see a decrease. It is estimated the change will raise €560 million annually.

Government have advised that from November of this year all homes will be revalued, but it would be done in such a way that it recognises the affordability challenges facing many families. Despite the fact that many properties would have significantly increased in value since 2013, a change in the calculation of band widths will ensure properties do not jump up any more than one value band.

There is also a change to the system that redistributes some of the property tax outside the local authority limits. Currently, 80% of the monies raised are retained in the area, with 20% sent to local authorities. From 2023 it is understood that one hundred percent will be retained in the local authority with central Government making up any shortfall.

There is no need for homeowners to do anything just yet as Revenue have advised they will contact homeowners directly once the changes have been passed into law.

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Property & Finance

Price and value are not the same thing



By Michael O’Connor

To understand markets, you first have to realise that ‘Price’ and ‘Value’ are not the same thing.

The major indexes continued to trade relatively flat in recent days. The vast majority of Stocks struggled to eke out gains as a lack of clear market catalysts kept institutional investors on the sidelines, while retail traders fuelled the ongoing meme stocks rally. As social media hype pushes the likes of AMC, GameStop and Bed Bath & Beyond ‘to the moon,’ the crypto market continues to trade in the opposite direction, with all major crypto names recording double-digit losses early in the week.

The short squeeze is back

Earlier this year, GameStop saw its share price run from $19 to $483 as the Reddit retail traders banded together to punish the wall street speculators. In recent weeks, the short squeeze is back in fashion. The new king of meme stocks is AMC Entertainment. Recently on the brink of bankruptcy, the movie theatre chain’s stock is up more than 2,000% this year after another roller-coaster week.

While this phenomenon is hard to comprehend at times, in simple terms, the Internet has brought forth the age of virality, and the stock market is not immune.

Younger generations who grew up on the Internet are now having a significant impact on specific companies. Their risk tolerance seems to be much higher than previous generations, and their willingness to band together to support a viral trend knows no bounds.

While these short-term individual stock surges may not significantly impact markets over the longer term, the meme stock craze is here to stay as the gamification of investing becomes a powerful force in an era of social media dominance.

All this speculation raises a lot of questions from investors. Nervous onlookers wonder if markets are broken, worried about how such ‘mindless risk’ can undermine the validity of the market as the ‘meme stock vigilantes’ blatantly disregard traditional valuation metrics.

All this recent ‘mispricing’ has highlighted one of the most common investing misconceptions.

To understand markets, you first have to realise that ‘Price’ and ‘Value’ are not the same thing.

Value is driven by cash flows, growth and risk. Of course, you can disagree about what those cash flows look like or how they are calculated, but the fundamental drivers of value remain the same.

Price, on the other hand, is simple economics 101. Demand vs. Supply. What drives demand and supply is typically mood and momentum. As a result, stock prices do not have to make rational sense at any one moment in time as they are driven by a myriad of human emotions.

Mood and momentum

For me, the current market conditions are reflective of a pricing market being driven by mood and momentum. That isn’t to say that this is necessarily a bad thing. Markets will always reflect human behaviour in some form, and sometimes this behaviour will be more pronounced as price and value push in different directions.

This recent price volatility doesn’t mean you have to change to momentum and memes when selecting your next investment. While the FOMO can be unbearable at times. The truth is, the value factors of cash flows, growth and risk are what ultimately drive markets over the longer term.

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