Brett Heath, the CEO of precious metals company, Metalla Royalty & Streaming has suggested that the burgeoning cryptocurrency market might contribute significantly if the world sees another financial crisis.
Heath, whose company offers customers leveraged exposure to precious metals, shared his thoughts in an interview this week with Kitco, arguing that the previous financial crisis was largely a result of an emerging investment trend. He said,
“When you look back to the last few decades and all of the financial crises that happened, they all have a couple of things in common. And one of them is the mass adoption of a new financial product or a new technology that is not very well understood.”
Comparing the current cryptocurrency market to the scene during the 2008 crisis, he noted that cryptocurrencies are mirroring mortgage-backed securities and collateralized debt obligations. The introduction of these then-new financial products and the lack of regulation around them had largely contributed to the crisis, and Heath believes that history might repeat itself with cryptocurrencies.
Interestingly, though, Heath admitted that similar to the famous dot-com bubble, when over-valued tech stocks proliferated the market, there will be cryptocurrencies that survive a market sell-off. He believes that Bitcoin’s environmental impact means that newer cryptocurrencies with improved technologies will take a huge portion of BTC’s market shares in the near future.
As for the other coins, though, he reiterated that most will die off because they have no intrinsic value and that the shock from such a market downturn would cause “significant financial repercussions,” as investors globally watch a significant amount of capital wiped out from their wallets.
Lastly, Heath backed blockchain technology as a tool that will change the world, but simply could not agree that the proliferation of tens of thousands of cryptocurrencies in the market will not have several impacts on investors as the years go by.
Meanwhile, the number of individuals and corporations investing in cryptocurrencies has significantly increased in the past year. A recent survey by Mastercard forecasts that this number could grow by another 40% within the next year.
