Precious metals can be used as a gateway between cryptos and fiat currencies – J.Rotbart & Co
Some cryptocurrencies are acting in a correlating manner to precious metals, believes Joshua Rotbart, Managing Partner at J.Rotbart & Co.
Joshua Rotbart is the precious metals investment expert. He has founded the company J. Rotbart & Co. which helps its clients to buy, sell and store physical precious metals and other tangible assets. He will be a speaker at the Blockchain Conference in Moscow on April 17-18, talking about cryptocurrencies as gold 2.0.
In the interview to the press service of Blockchain Conference Moscow, Joshua Rotbart explained how gold and cryptocurrencies are linked and talked about the correlation between them.
Interviewer: Blockchain Conference Moscow (BCM)
Speaker: Joshua Rotbart, Managing Partner at J.Rotbart & Co (J. R.)
BCM: Hello, Joshua! Could you tell us why conversion of cryptocurrency to gold and other precious metals is so popular? Apart from the fact that this way the profits are held in a stable asset, what are other advantages?
J. R.: Firstly, as you had mentioned, precious metals, and especially gold, are stable and traditional assets. Therefore, clients that made good fortune by investing in crypto are looking to secure their profits in a hassle-free manner.
Secondly, precious metals, and mostly gold, can be used as a gateway between cryptos and fiat currencies. We are aware of liquidity issues private investors and ICO experience, and converting to precious metals, can first, help them solve liquidity issues, and second, by parking their capital in liquid global currency with low volatility - which is gold - can help them with managing their expenses and operating their businesses.
In addition, the way one views gold and other precious metals as an asset class – they share quite a few common denominators, which makes them favourable for plenty of people in the crypto community.
BCM: How do you think relations between cryptocurrencies and gold are changing over time? What is currently happening which was not there before?
J. R.: Physical precious metals have a track record of over 3,000 years, has been and still is a means of payment, is a commodity and a liquid currency during financial crisis or times of uncertainty.
Cryptocurrencies are the “new kids on the block”- it started 9 years ago and has evolved: from a form of digital money to means of assisting remittances and wires and a variety of other great uses.
At the beginning of the cryptocurrency “age” we didn’t really know how it will behave, but as time goes by we see cryptocurrencies being advantageous and that some of them are even acting in a correlating manner to precious metals.
Gold and cryptocurrencies have different market maturity and trading mannerisms. Cryptocurrencies, unlike precious metals, are an emerging asset class, with high volatility and lower sample periods to mathematically predict movement accurately as we speak. However, when examined, there is a link that can be extracted – during times of uncertainty and politically charged periods, prices increase for both. On the other hand, there is an inverse relation as well, and that is when gold prices surge, the cryptocurrency price drops and vice versa. It will take some more time to identify the direct correlation; currently, there are quite a few recurring trends and possibly spurious relationships we can draw our own conclusions from.
BCM: In your blog, you are talking about the key differences between Bitcoin and gold. Could you mention a couple of important similarities that put both on the same rank, please?
J. R.: Of course, both physical precious metals and cryptocurrencies share quite a few similarities, such as: both are recognized global decentralised currencies, both bullion and cryptos are tools of portfolio diversification, gold has no counterparty risk and cryptocurrencies has a very low counterparty risk and both can be held privately and in a confidential manner.
BCM: What do you think about cryptocurrencies that are originally backed by gold?
J. R.: I think it is a very interesting idea as long as it’s implemented in the right way.
Both industries are very different, especially when it comes to physical holdings, the accompanying logistics and understanding of the market. However, as the world moves through ebbs of uncertainty, the combination of cryptos plus gold offer a unique product that is at the forefront of the digital space and simultaneously an assurance – this combined offering will introduce to both sets of players in the market: those who were hesitant to buy into the idea of cryptocurrencies, and those who do not fully see the value of an “old-school” commodity such as gold. However, when executing such project, it is extremely important to use well known and experienced members of the bullion industry that have a complete understanding of how the market works and the right “know how’s”.
This crossover will definitely bring about positive interest in the sectors and create more dialogue in the market. A reciprocal synergy so to speak.
BCM: Apart from cryptocurrency conversion, what other services does your company provide?
J. R.: J. Rotbart & Co. is well established for its variety of bullion services. We are a one-stop-shop provider helping clients procure, sell, store and transport physical precious metals worldwide, safely and securely outside of the banking system. We mainly source gold, silver, platinum and palladium for our clients, and arrange for them to be stored securely, and privately in one of 12 locations globally, while the client holds direct ownership.
We are also facilitating our clients in assaying, authentication and consulting services.
In 2017, J. Rotbart & Co. had started offering our clients with the option of lending funds when using the physical precious metals as collateral, a great way to invest funds in other projects while maintaining your holdings.
BCM: Could you tell us about the process of conversion of precious metals to cryptocurrency, please? Is it possible to only convert gold in a form of gold bars or coins?
J. R.: With pleasure. Supposing all paperwork is in order, we can open an account for client within a day easily. Upon onboarding, the clients mandate what kind of precious metals they want. We can help procure gold, silver, platinum and palladium in the forms of bars and coins and many more.
There are 12 strategic locations worldwide for clients to choose from for storage in private vaults.
Once the clients mandate fittingly, cryptocurrencies are sent to our company wallet and we arrange for conversion, pay the refiners and execute the order (usually within 1-3 business days, depending on volume).
Since we are a holistic service provider, once the physical holdings are in the chosen storage facility under direct title of client, a detailed storage receipt containing all information of the precious metals is issued to client.
We verify every step of the process to ensure the integrity and safety of the physical metals.
We also help clients who already own gold and other precious metals, sell their holdings and buy cryptos against them.
The whole idea is to keep the process and options practical, efficient and easy to execute for the clients, and assure clients of their assets’ security when handled by us, as we deal only with the most reputable partners in both the crypto and precious metals industries.