Brett Heath, CEO of precious metals rights and streaming company Metalla Royalty & Streaming, has warned that cryptocurrencies will “cause the next financial crisis.
Metalla Royalty & Streaming is a Canadian-based company founded in 1983 and currently has a net worth of nearly $500 million. metalla provides exposure to precious metals through royalty and mineral stream interests in gold and silver.
In an interview with financial news outlet Kitco News, Heath compared cryptocurrencies to the early 21st century crash triggered by Internet technology and the 2008 mortgage crisis, noting.
“When you look back at all the financial crises that have happened in the last few decades, you know that they all have some things in common. One of them is the massive adoption of a new financial product or a new technology that is not yet well understood.”
He added, “Looking back at the mortgage crisis of 2008, when we had a massive adoption of mortgage-backed securities, debt-backed bonds. Once the public embraced this new financial product, it collapsed, and that was a big problem.”
Describing cryptocurrencies as a “license to print money in the private sector,” the CEO questioned the liquidity injected into the market since the early 2020s.
Drawing comparisons between the U.S. M1 money supply (all liquid money in circulation), Heath noted that U.S. M1 has “increased 4.5 times” since January 2020. According to the Federal Reserve, U.S. M1 increased from $401.8 billion in January 2020 to about $189,350 billion in April 2021.Heath emphasized.
“That’s a phenomenal increase, and in such a short period of time. But if you measure cryptocurrencies in terms of their total market capitalization, its already grown by more than 10 times.”
Heath seems concerned about the systemic risk of investing massively in an asset class that he believes has “no intrinsic value,” with an end result similar to the sell-off caused by the Internet tech crisis of the early 21st century.
“When so much money disappears from digital wallets around the world, you better believe there will be some significant financial impact,” he said.
The precious metals proponent doesn’t seem worried about predictions that bitcoin will become a better store of value than gold. He also disputes the notion that Bitcoin’s maximum supply of 21 million makes it scarce or valuable, noting that other less valuable cryptocurrencies have what he calls better technical support behind them.
“What about the other 10,000 tokens associated with cryptocurrencies that exist now? Many of them have better technology, better privacy, and use much less energy?”
He added: “What is the value, or the true intrinsic value, of Bitcoin when there are so many coins in existence?”
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/metalla-ceo-cryptocurrencies-will-trigger-the-next-financial-crisis/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.