The CEO of precious metals royalty and streaming company Metala Royalty & Streaming, Brett Heath, has warned that crypto “will lead the charge in the next financial crisis.”
Metala Royalty & Streaming is a Canadian-based firm established in 1983 and currently has total assets of approximately half a billion dollars. MetaLa offers royalty of gold and silver and exposure to precious metals through streams.
Speaking to financial news outlet Kitco News on May 28, Heath compared crypto to the tech-induced crash of the early 2000s and the mortgage crisis of 2008, noting that:
“When you look at the last few decades and you see all the financial crises, you know, they all have some things in common. And one of them is the massive adoption of a new financial product or new technology that is very good. Kind of incomprehensible. “
“If we just return to the 2008 mortgage crisis” […] We had mortgage-backed securities, collateralized debt obligations largely adopted. And once the public embraced it, this new financial product crashed, it was a huge problem, ”he said.
The CEO described the cryptocurrency as “a license to the private sector to print money”, as he questioned the amount Liquidity that is pumped into the market Beginning in 2020.
Heath compared the United States with M1 – the total liquid wealth in circulation – noting that since January 2020, M1 has “increased four-and-a-half times.” According to the Federal Reserve, M1 increased from $ 4,018 billion in January 2020 to approx. done $ 18,935 billion by April 2021. Heath emphasized that:
“It’s an extraordinary growth and it’s such a short run. But if you look at cryptocurrency using the total market cap of cryptocurrency, it’s more than ten times.”
Heath appears to be a matter of concern Systemic risk from large scale investment In an asset class that they think has “no intrinsic value”, the end result is a sell-off similar to the tech crisis of the early 2000s:
“When you have so much capital wiped out by digital wallets around the world, you better believe that some significant financial consequences are being realized,” he said.
Mover of Precious Metals. Seem surprised by predictions of Bitcoin overtakes gold as a storehouse of value. He also questioned the notion that a 21 million maximum supply of bitcoin gives it a shortfall or value, and pointed to other cryptocurrencies of lesser value which are better technology supported by them:
“What about the other 10,000 cryptocurrency-related tokens and coins that exist today, many of which have better technology, better privacy, and use a ton of much less energy?”
“When there is so much, what is the value or what is that intrinsic value really?” she added.