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The Future Of Gold Rests With Blockchain, Says Sprott CEO
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Gold belongs on the blockchain markets, according to Sprott CEO Peter Grosskopf, who said that the precious metal is the digital sphere’s best new asset.
“Gold will never achieve regular consumer acceptance in your average household,” Grosskopf told Kitco News on the sidelines of the Mines and Money conference in New York, referring to gold’s insufficiency as an everyday payment metric. “Gold is, in the end, a monetary replacement, and in order to be an effective monetary replacement, it needs to be used by a wider base.”
Cue digital gold. As of recently, Sprott has undertaken several new ventures that fuse contemporary digital blockchain technology with conventional precious metals trading practices. Grosskopf justifies this transition with the claim that the future of gold is digital.
Despite its resemblance to bitcoin in terms of durability, portability, and fungibility, Grosskopf is careful to point out digital gold’s unique advantage – its security. “[It’s] more secure because it is backed by the physical metal and it has a ledger that is being tracked, so gold can’t be hacked,” he stated.
Grosskopf's comments come as the gold-silver ratio hits historic heights, last valued at 86.94, the highest level since 1993. Spot gold last traded at $1,284.80 an ounce, while spot silver last traded at $14.85 an ounce.
Grosskopf’s statements are complemented by a bullish forecast of the gold market. Labeling gold as a chameleon, he argues it can achieve substantial growth if losses occur in other economic markets, such as negative real rates. “Gold is mostly a hedge asset, and the most obvious way that it can turn it around right now is for the large financial markets, credit and equity markets, to change their tone,” he said.
In contrast to the increasingly bearish attitudes currently surrounding gold, Grosskopf noted the rise in gold sentiment, revealing that more sophisticated investors are entering the market.
“Nobody likes gold right now and we’re contrarian, and we think there’s great investment opportunities across the spectrum in gold even if it doesn’t move,” he said.
And when gold treads, silver sprints, Grosskopf argued. He sees greater opportunities arising for silver investors, revealing that “investors in general tend to be real silver bugs because they’re looking for that dramatic move, which we think, by the way, is coming.”
