Sprott Global Asset Manager Praises Blockchain for Making Gold A More Valuable, Practical Asset
The CEO of Sprott recently sat for an interview with Kitco News. In that, he made a bold prediction that gold will increasingly become more popular and a practical asset as blockchain technology starts to represent it in digital form.
Sprott Inc. is a leading independent asset manager dedicated to achieving superior returns for its clients over the long term. Mr. Grosskopf has over 23 years of experience in the Canadian financial services industry. He has a proven track record of building and growing businesses.
Most recently, he was President of Cormark Securities Inc. (“Cormark”). He has extensive experience as an advisor and underwriter to companies in a wide variety of sectors.
Sprott, which manages almost $8 billion in assets, also offers specialized financing and other banking services specifically for mining companies. They have formed a joint venture with Tocqueville to co-manage a precious metals mining strategy and are now raising money from investors.
The joint venture gives the managers the ability to invest in public gold mining companies, while also leveraging financing and Sprott’s technical, advisory, and M&A capabilities. After the long bear market, stressed gold mining companies have little access to capital.
Regarding how blockchain helps the situation with gold, Grosskopf said:
“I think it was quite realistic to criticize gold because you weren’t gonna go to a gas station and pay for your fill-up with gold coins. But now, when gold can be digitized, put on the blockchain — moved around very easily, quickly, low cost between financial accounts, and it will even be used as a payment metric. There’s gonna be cards coming out where you can use your gold to pay for things, including foreign purchases when you’re traveling.”
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 goes on to say that gold can be a chameleon in the sense that it can achieve substantial growth if losses occur in other economic markets, such as negative real rates. He elaborates:
“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.”