Gold, Silver, And Cryptocurrencies

– by Zoltan Erdey

Blockchain technology and cryptocurrencies are all the rage these days. The reality is that investors have flocked to Bitcoin and other alternative currencies in the droves. However, as a precious metals dealer, I have sadly observed that some investors have so much faith in Bitcoin (et. al.) that they sell their silver and gold and jump ship to cryptos. 

Precious metals versus digital assets
Now, this is normal behaviour in the equity investment world; one jumps ship from non-performing investments to those that perform better. But selling one’s precious metals (value you can hold and touch with thousands of years of history) for a digital asset (that exists only in the digital world that is less than a decade old), seems to be a poor decision. Perhaps the poor decision is not the purchase of cryptocurrencies, but the ‘either-or philosophy’ that guides that decision. While I am not advocating or opposing cryptocurrency ownership, physical precious metals and cryptocurrencies could live side-by-side in harmony. Both may form of a healthy and balanced investment portfolio.

Cryptocurrencies backed by gold
I think the cryptocurrency scene is currently deficient. Eventually, crypto investors will reconsider silver and gold, especially when (not if) cryptocurrencies will be born that are backed by gold. This is already happening, with Royal Mint Gold and Perth Mint announcing a gold-backed cryptocurrency. That is, the creation of a decentralised digital currency that is connected to physical precious metals (the Biblical form of money) guaranteeing its value beyond merely the electricity consumption costs it takes to mine it. Being in a position of owning precious metals in such a scenario would guarantee wealth security far more than for those who have only digital currencies, who would thus be chasing physical metals to have access to a gold and silver backed digital currency. I suppose following the herd may pay returns only for a short time. After that, it is the contrarian investor that laughs last. 

What does the Bible say?
But in all this, we ought to ask the Lord for wisdom, so that in all that we do, we honour the Lord Jesus Christ. Ecclesiastes 7:12 says, “Wisdom is a shelter as money is a shelter, but the advantage of knowledge is this: Wisdom preserves those who have it.” In other words, living wisely even in our saving and investing, puts us in a position to receive God’s blessings.

JOY! Magazine (April 2018)

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