The crypto currency sector has been on a meteoric rise in recent years, with some “coins” seeing gains of thousands of percentage points for early investors. With interest building and new platforms for novice users that make it easier to buy Bitcoin, Ethereum and other blockchain currencies, U.S. Gold Corp CEO Edward Karr says there may still be big gains to be had.
In the following interview with SGT Report, Karr notes that just as is the case with precious metals, one of the fundamental reasons behind the crypto coin boom is that investors have lost confidence in their governments and economies. This has left them little choice but to flee traditional fiat currencies, which are literally being printed by central banks to the tune of trillions of currency units globally.
Like gold and silver, crypto-currencies offer a store of value, anonymity, and portability across borders. These core blockchain characteristics have enticed investors looking to keep their monetary activities private and increased their global demand as a crisis asset. And when that crisis does strike, what we’re seeing with the parabolic moves in Bitcoin and Ethereum, says Karr, will be replicated in precious metals assets, because the fundamental reasons behind shifting one’s money into anonymous and portable crypto-coins are the same reasons for why contrarian investors have held gold and silver throughout history:
I think all these gains in the crypto currency space… them going parabolic recently… this is the canary in the coalmine of the gains that are going to come in the precious metals sector… At the end of the day, when you look at gold and silver, precious metals have stood the test of time…
One of the reasons these crypto currencies are going to the moon is that a lot of investors… and mainly you have to look at the Chinese… look at Venezuela… when you are in economies where you know you are absolutely living in a Ponzi scheme debt bubble, you are willing to sell your Renminbi at any cost… And you would rather have Bitcoin… If you had Bitcoin and lived in Venezuela you’d still have some purchasing power parity…
Full Interview:
You look at crypto currencies… you look at the move that’s happened over the last several years in Bitcoin and Ethereum more recently… these crypto currencies have gone parabolic… so the gains have been astronomical… several hundred to multi-thousand percent if you got in and out at the right time… So you can understand why people would be attracted to the sector… Initial Coin Offerings are a brand new way to raise capital… it seems like there is a new ICO du jour that’s coming out and people are raising five, ten, twenty million dollars almost for any project… To me it’s very reminiscent of the dotcom boom… if you had any business out there and put dotcom in the business name… instantly your stock doubled or tripled overnight.
So, can you make big gains in the crypto currencies? Without a doubt… should you be looking at, maybe prudently speculating in some of these crypto currencies and ICO’s? Without a doubt…
Should you be selling all of your gold, all of your silver, all of your mining stocks and going all-in into this sector?
No way.
This is an extremely speculative portion of the overall market… should be an extremely small portion of one’s overall portfolio… just as quickly as these crypto currencies can go up they can come down as well…
Karr explains that in the very near future gold and silver will serve a similar purpose for panicked investors who will be fleeing stock markets and fiat currencies for assets that will retain value amid crushing government debt and an inflationary rise in prices like we’re seeing in Venezuela for basic goods:
It’s not a matter of “if,” it’s a matter of “when.”
And it’s certainly going to happen again.. the beauty about precious metals and the mining space is that these are cyclical industries… this market peaked out in 2011… we went into one of the worst bear markets anyone in this industry remembers… and these bear markets tend to last four or five years in really severe bear markets… we’ve been in a five to six year absolutely devastating bear market…
But gold is up off the lows… The governments and central banks have been quantitatively easing and printing new currency units ad infinitum… so everything is really setting up for the next bull market in this sector.
We’re in the first inning of a nine inning ball game…
Blockchain crypto-currencies may prove to be a resilient asset class in coming years as they are more broadly accepted as mechanisms of exchange. But discounting gold and silver’s 5,000 year history as crisis currencies and stores of value at a time when governments and central banks around the world are printing trillions of Dollars, Euros and Renminbis in a race to the bottom may prove to be a foolish mistake.
Edward Karr is the Chief Executive Officer of U.S. Gold Corp.
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