In a medium saucepan, combine ketchup, bourbon, apple cider vinegar, brown sugar, Worcestershire sauce, molasses, smoked paprika, garlic powder, onion powder, black pepper, salt, and cayenne pepper if using.
Reduce heat to low and let the sauce simmer for 20 minutes, stirring occasionally, until it thickens and the flavors meld together. Remove from heat and allow to cool.