Cryptocurrencies have been a hot topic in 2017, and at the recent New Orleans Investment Conference, Thom Calandra of the Calandra Report took the time to explain what he thinks of them and what gold market participants can do to make the yellow metal more competitive.
“Right now … the blue chips, the blockchains … they’re all doing well, and guess what — even housing is starting to kick in in a big way again in some parts of the world. It’s all competing against the precious metals,” he said, adding, “if the competition is doing well, you’re going to go to the competition.”
In his opinion, one way to make gold more appealing, especially to young people, would be to add a tech angle to the market. Calandra explained, “we need an app — a gold app or a precious metals app … there’s not that kind of easy mobile platform associated with gold or any of the precious metals.”
“To be honest, I may take some heat for this, but I think the World Gold Council needs to do something about this. That’s … part of their mantra: get people, especially younger folks, interested in gold. Get gold to become more of a digital idea,” he said.
INN: To start off, I want to ask you about cryptocurrencies. You mentioned that’s a topic you’re interested in right now — mainly how they’ve become so popular and have eclipsed precious metals a little bit. What do you think allowed that to happen?
TC: When you look at what gold has to compete with — every investment class has a main competitor. During the housing boom, before the housing bust of  … housing did better than gold, even though the gold price was doing well. Now [it’s] the stock market, as in any stock market in the world that has blue chips — McDonald’s (NYSE:MCD), Lockheed Martin (NYSE:LMT). That’s a competitor to gold and other natural resource investments. We also have cryptocurrencies, the blockchain technology, competing against gold. There you get young people come in — and by young people, I mean anybody from 16 to 46. [They] come to me and say, “have you bought yet? Have you bought yet? Have you used Coinbase or one of those other trading platforms to buy one of these cryptocurrencies?” Whether it’s bitcoin or ethereum or one of the other ones.
I find it very interesting. There’s a guy that I talk to all the time that runs a coin company and a bullion company — Dana Samuelson from American Gold Exchange. I think he explains it best: if the competition is doing well, you’re going to go to the competition. Right now, as we’ve seen, the blue chips, the blockchains … they’re all doing well, and guess what — even housing is starting to kick in in a big way again in some parts of the world. It’s all competing against the precious metals.
INN: Is this a cyclical kind of thing? Does the gold industry need to be doing anything to attract young people?
TC: Sure. Charlotte, in some of my talks … I always get kind of a stinker because it’s an interesting concept. How do you wrap your head around this? We need an app — a gold app or a precious metals app. Don’t ask me, “what would this app do?” I have no idea. We have apps for everything now. We have apps to find our cars. We have apps to find a place to eat, apps to book our hotels.
What would a gold app do? Well, of course, it could start by giving us the gold price. There are some cryptocurrencies that have their base, their root in gold. But there’s not that kind of easy mobile platform associated with gold or any of the precious metals — platinum, palladium, silver — that can help this thing. To be honest, I may take some heat for this, but I think the World Gold Council needs to do something about this. That’s … part of their mantra: get people, especially younger folks, interested in gold. Get gold to become more of a digital idea.
INN: You mentioned people have been asking you, “have you bought bitcoin yet?” Have you bought bitcoin yet?
TC: I have never bought any of the blockchains. I have trading accounts at three of these different platforms, you know, like Coinbase, and haven’t pulled the trigger. I’ll tell you, it was funny — I was in Cambodia about four months ago, and it was … July 30 and I was telling a small group of Cambodians who wanted to know, “how do we get into the markets? How do we start investing?” I said, you should look at some of the blockchain currencies, cryptocurrencies like bitcoin — at the time it was $2,100. They looked at it, and they got back to me. By the time I got back to the States, every month I would say, “have you bought yet?” And they would say “no, no, no, it’s too high and I’m waiting for it to fall.” So it’s not $2,100 now, it’s $6,000.
Now, I’m not advocating going out — and really, I don’t have enough of a formed opinion about how long bitcoin or ethereum or any of the other coins are going to last. There’s so many of these coins coming out now [with] tiny market caps, but … if you add them all up, they’re only $100 billion worth of market cap. Blockchain technology [is a] distributed ledger system that provides anonymity, but also provides a certifiable record of transactions — it’s going to be around for a long time.”
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.