(Kitco News) - Activity in the digital precious metals sector is heating up as Wellfield Technologies has closed its deal to purchase Tradewind Markets for $5.795 million.
At the same time, Wellfield has also launched a non-brokered private placement to raise C$3 million dollars.
Wellfield said the acquisition will create a transformational digital platform for precious metals investors and producers. The company said that it is planning to merge its current digital financial platform with Tradewind's VaultChain products, which provides consumers with a digital platform for their physical gold. The company said the merger will give the digital gold and silver exchange access to 3.5 million registered users.
The company added that it is also planning to create a regulated blockchain-based spot gold and silver market.
Finally, Wellfield said it is also looking to use Tradewind's digital exchange platform to create institutional fixed-income and volatility products, providing precious metals investors with a new income stream.
"Leveraging the protocols Wellfield released in December 2022, the Company expects to offer investors in the ecosystem the ability to use their on-chain gold and silver holdings to generate income. The lack of income generating potential is currently one of the most cited reasons to not invest in precious metals," the company said.
Levy Cohen, CEO of Wellfield, said that this evolution of the digital precious metals market will provide new opportunities for investors and gold producers.
"In many ways, today's precious metals market still resembles the structure that has existed for decades, leaving persistent unmet needs for both investors and producers … Tradewind's solution offers the convenience and cost advantage of a digital solution, with the unique assurance that each digital ounce is backed by physically deliverable metal," Cohen said in a statement. "The combination of Wellfield's intellectual property and settlement capabilities with Tradewind's precious metals trading and custody platform, will enable us to build a ground-breaking set of solutions targeted at these important investor and producer pain points."
Ryan Graybill, Director of Tradewind, said that while VaultChain Gold and Silver has seen solid growth since its launch in March 2018, the company is just scratching the surface when it comes to potential growth in the precious metals sector.
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"Wellfield's technology and vision empowers us to expand our capabilities and leverage new opportunities that didn't exist when Tradewind began its journey. We are excited about the possibilities to add new value for our investor and industry partners in the gold and silver markets and we look forward to continuing on our mission as part of the Wellfield team," Graybill said.
Tradewind's digital exchange has seen solid growth in the last five years through its retail channel distribution primarily by Kitco Metals Inc., one of North America's largest online retailers and full-service providers of precious metals, and a leading global commodities media and information provider.
Bart Kitner, president of Kitco Metals, said that this evolution will provide further growth opportunities for the digital precious metals sector.
"We are excited to be working with Wellfield's technology and vision to expand the capabilities of the digital exchange platform," he said.
Early in its formation, Tradewind attracted significant interest and investments from industry leaders in the precious metals space, who will continue as shareholders of Wellfield, including: Sprott Inc., Agnico Eagle Mines Limited, Newmont Corporation, IAMGOLD Corporation, IEX Group, and Wheaton Precious Metals Corp.
