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Bitcoin is an inspiration for gold’s digitalisation, says Sprott CEO

Gold will go digital and shouldn't compete with Bitcoin, says Sprott CEO

The CEO of investment management firm Sprott, Peter Grosskopf, has urged investors not to view Bitcoin and gold as competitors while projecting that the precious metal will also go digital. 

Speaking to Kitco News, Grosskopf suggested that Bitcoin needs to be considered as an inspiration for gold as it can offer investors a hedge against inflation. 

According to the CEO, the tremendous growth of Bitcoin highlights the untapped potential of gold, especially if the metal goes digital. He notes that technology to support digital gold has already been tested. 

However, he acknowledged that Bitcoin still has the upper hand based on the value of capital flow it attracts.

“Bitcoin’s been winning the battle for flows. No question. And that has hurt gold in the short-term, but in the long-term, they’re both going to the same place…I think a lot of the technology needed to take gold digital has been proven. I expect that gold will eventually go digital, and that is going to create a lot of new users and investors,” said Grosskopf. 

He also stated that Bitcoin is now directly competing with gold, especially after the market cap of the entire crypto market surpassed $2 trillion. The executive notes that the sector’s growth is an indicator, investors are looking for alternative currencies.

‘Investors betting against fiat currency’

Grosskopf added that Bitcoin’s new record price highlights that investors are betting against fiat currencies that are losing value. He pointed out that the Federal Reserve policies and excessive printing of money have come under scrutiny from consumers, and Bitcoin stands a big chance of benefitting. 

Last week, Bitcoin surged to a new record high topping the $66,000 price mark in the wake of SEC’s approval of the first Bitcoin exchange-traded fund. With the latest product, Grosskopf believes that it will open limitless opportunities for the cryptocurrency sector. 

Following Bitcoin’s 2021 surge, the asset’s proponents have termed it a digital gold and potential replacement for the precious metal. Notably, gold is the perennial hedge against inflation. 

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