Both precious metals and crypto are generally seen as two widely differing sectors, one, a trusted store of value that has endured over centuries, while the other, a nascent and wildly innovative sector that is also a way out of the fiat currency system. The two in combination could be a match made in heaven.
It would be generally accepted that investors into both sectors are often at polar extremes. The archetypal gold and silver bugs are older, and they’ve seen it all. While the world goes mad, they continue to stack their coins and bars, comfortable in knowing that long-term, the rise in value against the dollar will be unstoppable.
Meanwhile, the younger cryptophiles are fervid in their support for the Bitcoin led crypto revolution. They believe that eventually, the fairness and transparency that crypto brings to the table will cancel out the obscure and nefarious practises of the bank-led fiat monetary system.
However, times are changing, and the main similarity of both sectors is that they are perceived as a way out of the current inflation ravaged traditional finance system that is run to the advantage of the banks.
In an article today on Business Insider, Daniel Fisher, managing director of bullion dealer Physical Gold, sees the advantages of combining both worlds:
"I think there's actually similarities in mindset with these investors in that they want to move away from fiat currency. They want to take control of their finances and maybe don't trust the banking system. So, I find there's a big crossover between those buying bullion and those buying crypto,"
According to Fisher, there are a couple of ways that both sectors can combine. Firstly, he points to NFTs as being a perfect way to tie uncontestable ownership of gold bars to the blockchain, thereby completely negating the problems of having to physically move the gold from one vault to another.
His company is planning to launch their own version of this type of play by leveraging the power of NFTs in a more nuanced way.
"We actually tell our customers not to speculate and take risk, even with ETFs. If you buy 10,000 pounds of a gold ETF you're not guaranteed that actually there's 10,000 pounds worth of minted bars being held for you. A lot of the time they're leveraged so there may be 2000 pounds or 3000 pounds worth of actual bars. If everyone tried to sell at the same time there may be an issue."
"What we've thought is that we can combine NFTs and the supply of physical gold bullion. So the idea we're working on developing is you'd come onto our website and you would make a qualifying purchase of real gold. Then there'll be three tiers of NFTs you can get with it, so tier one may be a 10,000 pound purchase of bars or coins.”
"You could purchase an exclusive NFT from a range of a thousand designs, all completely different. People still get the real gold in their hand, but they're getting access to exclusive NFTs as well, that can be traded. The NFTs may also have community benefits attached to the underlying smart contracts like early access to new coin releases, or even exclusive access to some assets."
NFTs will revolutionise ownership of all assets going into the future. Whether you are tying them to individual gold bars or collections of minted bars, this type of process makes huge sense. Precious metal stackers and crypto hodlers unite - the business opportunities are vast.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.