CEO of precious metal royalty and streaming company Metalla Royalty & Streaming, Brett Heath, has warned that crypto will be the prime culprit in the next financial crisis. Founded in 1983, the Metalla Royalty & Streaming company is based in Canada and has a current net worth of nearly half a billion dollars. Through royalties and streams in gold and silver, Metalla offers exposure to precious metals. According to the boss of this company, the BTC/EUR price will result in the next financial crisis. Heath compared Bitcoin and the other cryptocurrencies to the tech-driven crash of the early 2000s and the mortgage crisis of 2008 when he spoke to financial news outlet Kitco News. He noted that if you look back at the past decades and at all the financial crises that have occurred, they all have a number of things in common.
The mass adoption of a new financial product or technology that is not well understood is one of them, according to Heath. He went back for a moment to the mortgage crisis of 2008, when there was massive use of mortgage-backed securities, collateral-backed debt obligations, according to Heath. Then, once the public embraced this new financial product, it collapsed. He added that it was a huge problem. The CEO described cryptocurrencies as a “private sector license to print money”. While he questioned the amount of liquidity that has been pumped into the market since early 2020. Heath compared this to the United States’ M1, which is the total liquid money in circulation. He also noted that since January 2020 the M1 has become “four and a half times larger”.
The Federal Reserve showed that the M1 went from $4.018 billion in January 2020 to about $18.935 billion in April 2021. This is, obviously, an extraordinary increase in such a short time, which worries Brett Heath. According to the CEO of Metalla Royalty & Streaming, it is even worse when you look at it with the total cryptocurrency market cap. In this case, that is more than tenfold. Heath clearly is concerned about the systemic risk of mass investments in an asset class, which includes the XRP price. According to him, this does not contain any intrinsic value with the end result being a sell-off similar to the technology crisis of the early 2000s. Heath indicated that when you have wiped out so much capital from digital wallets around the world, there is a very high chance that there will be some significant financial implications.
Altcoins and tokens
For predictions indicating that Bitcoin will outpace gold as a store of value, the precious metal advocate seemed insensitive in his interview with Kitco News. Brett Heath also questioned the idea that the maximum supply of 21 million Bitcoin gives it any specific scarcity or value. In doing so, he pointed to other lower-value cryptocurrencies that are backed by what he believes to be better technology. These are often referred to as altcoins and include the Cardano price among many more cryptocurrencies. On top of that, Heath wondered what the role of the other 10 thousand cryptocurrency-related tokens and coins would be in the future. A lot of them already exist, but experts expect that many more will be launched in the near future. Non-fungible tokens are clear examples of this hype, with the Charlie Bit Me video being sold for a whopping 500 thousand British pounds. Heath thinks that a lot of altcoins and tokens have better technology than Bitcoin, while their privacy and energy usage is much better too, according to the CEO of Metalla.