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According to Metalla Royalty & Streaming CEO Brett Heath, cryptocurrency could cause the next global crisis. Speaking of digital coins, the expert compared cryptography to the tech crash of the early 2000s and the mortgage crisis of 2008.
"When you look back to the last few decades and 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," Heath said.
Speculating on the reasons for the upcoming financial crisis, he described cryptocurrency as a "license for the private sector to print money". Heath also called into question the amount of liquidity that had been pumped into the market since the beginning of 2020. "If we just rewind to the mortgage crisis of 2008 [...], we have had the massive adoption of mortgage backed securities, collateralized debt securities. And once the public embraced that, this new financial product, then it fell apart. It was a huge problem," he added.
The head of Metalla Royalty & Streaming expressed concerns over a systemic risk posed by the massive amounts of capital flowing into an asset class that has "no intrinsic value". He believes that this will ultimately lead to a sell-off similar to the tech crisis of the early 2000s. Besides, Heath questions the fact that Bitcoin’s limited supply of 21 million coins gives it scarcity or particular value.
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