A marijuana-linked cryptocurrency called PotCoin had a huge spike in its price after former NBA star Dennis Rodman wore a T-shirt emblazoned with its logo during his trip to Singapore for the historic meeting between the U.S. and North Korea on Monday.
But what is PotCoin and why is everyone clamoring to snatch it up after Rodman wore the sponsored shirt, which has the slogan "Peace Starts in Singapore" written on it. Here's what you need to know:
What is PotCoin?
PotCoin bills itself as an "ultra-secure digital cryptocurrency, network and banking solution" for the legal marijuana industry and claims to the be the first digital currency that was established specifically to process marijuana that was purchased legally. There are other cannabis-focused cryptocurrencies like CannabisCoin and DopeCoin, though PotCoin is one of the most popular at the moment.
Established in 2014, PotCoin is a Canadian-based digital coin that you can send and receive over the internet and use to pay for goods and services, as well as purchase it directly from an exchange. You can buy, sell and trade PotCoin using PotWallet and other crypto exchanges, though it's not available on any main indices. PotCoin's current market cap is $21.5 million — much smaller in comparison to Bitcoin's $116 billion market cap.
While it's unclear if the crypto craze is here to stay, a unique aspect of the burgeoning legal marijuana industry is that ordinary banks will not take money from marijuana businesses (it is not legal on the federal level), offering a ripe opportunity for crypto to step in while traditional banks are still shying away from the cannabis market. The ability to trade a virtual currency like PotCoin anonymously over a decentralized network is especially appealing for such an industry. PotCoin also touts its low fees, ability to send money to any country in the world and the low risk of fraud due to blockchain technology as benefits of using the digital currency.
Why did PotCoin's price soar?
PotCoin started trending online thanks to the exposure garnered by Rodman, who referred to the currency as his "loyal sponsor" — PotCoin paid for part of his trip to Asia for the historic summit between Kim Jong Un and President Donald Trump. Ironically, marijuana is illegal in Singapore, where the maximum sentence for smoking marijuana is the death penalty.
But this isn't the first time Rodman has caused PotCoin to spike. He also wore a PotCoin shirt on a sponsored trip to North Korea during the summer of 2017 that boosted PotCoin's value.
PotCoin was trading at $0.0965 as of mid-day on Tuesday, up 23% in one day. If you'd invested $1,000 in PotCoin Monday, you'd be up $230 right now. If you somehow had the foresight to invest in PotCoin when it was first made available in early 2014 and was trading at only $0.0046, you would have a 2,000% return on your investment right now. In other words, $1,000 invested in PotCoin in early 2014 would be worth roughly $21,000 today, assuming you hadn't already sold at some point.
Bear in mind, however, that almost any cryptocurrency investment made years ago would show a huge return on investment today. Bitcoin was worth about $800 at the start of 2014, and went as high as $17,000 toward the end of 2017—a theoretical return of around 2,000%—before retreating to under $7,000 lately.
And, like Bitcoin, PotCoin appears to have peaked in 2017: It was trading as high as $0.42 last December. If you'd invested $1,000 in PotCoin then, it would be worth only about $230 right now.