Metalla Royalty & Streaming CEO Brett Heath has warned that crypto will “lead the charge into the next financial crisis” and questioned the true intrinsic value of Bitcoin.

The CEO of precious metals royalty and streaming company Metalla Royalty & Streaming, Brett Heath has warned that crypto will “lead the charge into the next financial crisis.”

Metalla Royalty & Streaming is a Canadian-based firm founded in 1983 and has a current net worth of almost half a billion dollars. Metalla offers exposure to precious metals through gold and silver royalties and streams.

Speaking to financial news outlet Kitco News on May 28, Heath compared crypto to the tech induced crash of the early 2000s and the 2008 mortgage crisis, noting that:

When you look back the last few decades and you look at all of the financial crises that happened, you know, 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's not very well understood.

“If we just rewind to the mortgage crisis of 2008 [...] We had the mass adoption of mortgage-backed securities, collateralized debt obligations. And once the public had embraced this, this new financial product then it crashed, It was a huge problem,” he added.

The CEO described cryptocurrencies as a “license for the private sector to print money,” as he questioned the amount of liquidity that has been pumped into the market since the beginning of 2020.

Heath drew a comparison with the United States’ M1 – total liquid money in circulation – noting that since January 2020, the M1 has “increased by four and a half times.” According the Federal Reserve, the M1 went from $4,018 billion in January 2020, to around $18,935 billion as of April 2021. Heath emphasized that:

That's an extraordinary increase and it's such a short period of time. But if you look at cryptocurrency using the total market cap of cryptocurrency, it's over tenfold.

Heath appears to hold concerns over systemic risk from mass investment into an asset class that he feels holds “no intrinsic value,” with the end result being a sell-off similar to the tech crisis of the early 2000s:

“When you have that amount of capital wiped out of digital wallets across the globe, you better believe there's going to be some significant financial repercussions that are felt,” he said.

The precious metals proponent appears unfazed by predictions of Bitcoin surpassing gold as a store of value. He also questioned the notion that Bitcoin’s max supply of 21 million gives it scarcity or value, and pointed to other cryptocurrencies of lesser value that are backed by what he says is better technology:

What about the other 10,000 cryptocurrency-related tokens and coins that exist today, many of which have better technology, better privacy, and use a ton of a lot less energy?

“When there's so much, what's the value or what's really that intrinsic value?” he added.

Cryptos feed

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

Bitcoin finds buyers despite new six-month and 2022 lows, BTC relief rally on deck

Bitcoin price action on Monday was mainly in a full-blown bear attack, with a new 2022 and six-month lows hit. That all changed near the end of the NY equity market session when buyers poured in to rally Bitcoin higher to close in the green for the second day in a row.

More Bitcoin news

Binance Coin bulls may take over as BNB finds support at $350

Binance Coin price has fallen more than 31% since last Monday and over 51% from the all-time high. A deeper push lower is likely if the bulls fail to keep Binance Coin above its final support zone. New 2022 and seven-month lows are coming up.

More Binance Coin news

Ethereum Price Prediction: Ethereum could drop to $1,800

Etheruem price action, like the rest of the cryptocurrency market, has been overwhelmingly bearish. Since last Monday, ETH has fallen more than 34% and is currently more than 50% below the all-time high. Ethereum price has one sliver of support left, preventing a significant sell-off.

More Ethereum news

Centrifuge leads the current parachain slot auction on the Polkadot network

Centrifuge, a real-world DeFi project, is leading the current parachain slot auction. Polkadot price dropped in the recent crypto bloodbath and analysts have predicted a downward continuation of the altcoin. 124M Polkadot tokens is locked in a crowdloan.

More Polkadot news

Bitcoin: BTC may capitulate to $30,000

Bitcoin price has dropped considerably over the last three weeks. The recent downswing has made things worse for BTC and hints that a steep correction could be on its way.

Read full analysis

BTC

ETH

XRP