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Gold Investing in a Digital World

By Kerry Stevenson, Founder, Gold & Alternative Investments Conference

Published on April 10, 2021

Can bitcoin and gold sit well together or does bitcoin pose a challenge to gold in the digital world?

As the old Chinese saying goes, “May you live in interesting times”. Like it or not, we live in very interesting times. A time of uncertainty and money printing, but also a time of incredible creativity.

As an investor and also the founder of the Australian Gold conference, I have spoken with many intelligent people around the world and each of them has a different perspective on how to grow and protect wealth in these turbulent and ever-changing times.

It is abundantly clear that governments around the world are doing their best to keep the current system afloat by continuing to print “funny money”, commonly known as fiat currency. At the same time, they are making a strong case for a reset to a full digital money system, citing issues such as funding terrorism and crime as the reasons for the switch.

While the price of bitcoin and other cryptocurrencies have risen in price in a spectacular fashion and much has been made of institutional money moving into bitcoin, the fiat price for gold has remain stagnant. Many observers have said that gold is being replaced by bitcoin due to it being fast and digital, but will there always be a place for gold and silver in a well-balanced portfolio?

In my opinion, gold is an insurance policy against the relentless money printing machine whereas crypto, and more specifically bitcoin for this commentary, is a more speculative option but one that, in a tsunami of liquidity, should continue to rise in price against the continued printing of fiat currency.

Figure 1: Change in annual production – Precious metal coins vs money 2019 vs. 2020

Source: Visual Capitalist

We have to also bear in mind that bitcoin has only been around for just over 10 years and is purely digital, whereas owning physical gold (not the paper exchange-traded funds or ETFs) means that you have control of the asset. What happens if the government decides to step in and put a lot more regulation around the crypto space? What happens if one of the main exchanges suddenly closes like Mt Gox did back in 2014 without warning?

A recent report from J.P. Morgan found that institutional investors are flocking to bitcoin and leaving gold out to dry. So, is the yellow metal dying? Bitcoin, which has rallied over 150% in 2021, has greatly outpaced other assets including the Dow and gold. The Grayscale Bitcoin Trust has seen inflows of almost $2 billion since October 2020, compared with outflows of $7 billion for ETFs backed by gold, according to J.P. Morgan.

With institutional investors now getting interested in the crypto space, will we see a greater inflow of funds to the sector and, as a result, the price being driven higher? Well that certainly seems to be the case at the moment, with one tweet from Michael Saylor, the co-founder of MicroStrategy, about investing in bitcoin sending the price higher. Mainstream media is also now starting to take notice, with CNBC including bitcoin on its ticker at the bottom of the screen.

Two-thirds of millennials prefer bitcoin to gold as an investment because millennials are more comfortable with technology and can grasp the way to use and transfer funds more easily. Will that see the next generation moving away from the traditional safe haven asset of gold? Only time will tell.

Figure 2: Timeline of bitcoin’s major events

Source: howmuch.net

With all that being said, bitcoin should complement gold rather than replace it. Both have a place at the table and with the amount of uncertainty in the market and the continuing money printing by central banks, fiat currency looks like the one to avoid at all costs.

Ray Dalio, founder of Bridgewater Associates, has previously spoken out against bitcoin but has recently said that he thought bitcoin and other cryptocurrencies had “established themselves over the last 10 years and were interesting gold-like asset alternatives”.

Jim Powers, director of investment research at Delegate Advisors, isn’t convinced. “Bitcoin is not the new gold because the old gold (i.e., gold) still works just fine,” he said. “While similarities exist between gold and bitcoin (e.g., store of value, price determined by supply and demand), gold has been recognised as a store of value for millennia. Bitcoin has been recognised as a store of value for less than a decade”.

Then there’s bitcoin’s reliance on the Internet. “In an end-of-the-world-style financial apocalypse, individuals can still hold and trade physical gold”, adds Powers. “Try buying a loaf of bread with bitcoin if the Internet stops working”.

So, can bitcoin and gold play well together in the sandpit of life or do we, as investors, have to make a choice? I believe that in a world full of change, uncertainty and money printing, and governments that are wildly out of control, there will be a need to hedge and diversify. I am not saying that you need to go all in with either asset but exposure to both will ensure that you are best placed to take advantage of the swings and roundabouts in the new digital world.

In the end, it depends on your goals. Bitcoin is a better investment for short-term potential gain – but you also have the potential to lose a lot of money. Gold, however, is a stable investment that is almost guaranteed to hold its value in the long term.

The last word will go to Mike Venuto, co-portfolio manager of the Amplify Transformational Data Sharing ETF, a US$1 billion ETF. “I would probably pick bitcoin but why not both? Gold and bitcoin have a very similar aspect to the portfolio. I would add gold as a diversifier. I would add bitcoin as a diversifier. The hedge is diversification. Bitcoin is a tool to get there. Bitcoin is a hedge to losing money to something stable”.

KERRY STEVENSON is the founder of the Australian Gold and Virtual Gold conferences, and is an investor and entrepreneur who has a passion for helping people understand the ever-changing world of money and investing. She also points out that she is not a financial advisor or an accountant and that everybody should do their own research and stop watching Netflix.

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Singapore Bullion Market Association Secretariat-Lee-Jia-Yi

Lee Jia Yi

OPERATIONS & ADMIN EXECUTIVE
Before joining SBMA, Jia Yi worked as an Admin & Reporting Officer in her previous role. She holds a Diploma in Business & Social Enterprise from Ngee Ann Polytechnic. Jia Yi is responsible for managing and maintaining physical and digital files in SBMA, supporting invoicing processes, reconciling receivables and payables, coordinating meetings and conferences. Additionally, she will provide support to the team and assist the Business Director in managing the Association’s office operations and general administrative activities.

SECRETARIAT SBMA-Emily-Oh

Emily Oh

OPERATIONS & ADMIN EXECUTIVE
Emily Oh is the Operations & Admin Executive, a seasoned professional who values teamwork and effective communication. She is skilled at adapting to new challenges and takes a proactive and resourceful approach to every task. Before joining SBMA, Emily had experience coordinating international travel arrangements and spearheading community initiatives. Her role at SBMA will be providing operational and administrative support for projects and other matters to the team.

SECRETARIAT SBMA Clara-Chang

Clara Chang

MARKETING & COMMUNICATIONS EXECUTIVE
Clara Chang joins SBMA as the Marketing & Communications Executive, enriching the team with her extensive experience in content creation, social media management, and digital marketing. Prior to joining SBMA, Clara held the position of Marketing Executive at her previous job. She holds two bachelor’s degrees from the University at Buffalo, one in International Trade and another in Geographical Information Science. Her core duties will include maintaining the SBMA website, managing the quarterly Crucible newsletter, among other responsibilities.

SBMA Committee-Photo-john-levin

Mr John Levin

Global Metals
TD Securities
John Levin is the Head of Metal Sales & Trading – APAC at the Toronto Dominion Bank’s Singapore office. Prior to this role, he devoted seven years to leading precious metal sales for the ANZ banking group in his home country, Australia. Notably, from 2009 to 2011, John played a significant role on the management committee of the London Bullion Market Association while serving as the Head of Precious Metals Sales for HSBC Global Banking and Markets in the UK.

SBMA Secretariat-Fabian-Lew

Fabian Lew

MARKETING & COMMUNICATIONS OFFICER

Fabian was a Business Development and Marketing Associate before joining SBMA. He graduated from Singapore Management University with a Bachelor’s degree in Economics.

He has joined SBMA since February, 2022.

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Margaret Wong

BUSINESS DIRECTOR

Margaret Wong, Business Director at SBMA (Singapore Bullion Market Association), brought valuable experience from her previous role at the World Gold Council (WGC). Her tenure at WGC provided her with extensive exposure to the gold community in Singapore and the broader region. This background has been instrumental in establishing strong working relationships within the industry.

Margaret’s role at SBMA encompasses a diverse range of responsibilities. She oversees office management, business support processes, finance, and administrative functions essential for the smooth operation of the team and management committee. Additionally, Margaret handles membership matters, member communications, and addresses public inquiries related to SBMA.

One of Margaret’s key responsibilities is coordinating with the Event Management Company for SBMA’s prestigious annual event, the Asia Pacific Precious Metals Conference. This flagship conference plays a crucial role in the industry, making her involvement pivotal in its success.

Described as resourceful and self-motivated, Margaret Wong brings a wealth of skills and experience to her role at SBMA, ensuring efficient operations and effective engagement within the precious metals community in Singapore and beyond.

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Albert Cheng

Chief Executive Officer

Albert Cheng joined the World Gold Council in March 1993 as a Regional Manager, becoming Managing Director, Far East in 2003. He retired at the end of March 2015 and was subsequently named its Advisor. He has also been an International Advisor to the Shanghai Gold Exchange since 2002.

His marketing career began with Dentsu Young & Rubicam, Hong Kong in the early 80’s. He began gold marketing in July 1985 when he joined the Royal Canadian Mint as a Regional Manager for Southeast Asia.

He was appointed honorary CEO of SBMA in November 2015. He is responsible for the success and strategic development of SBMA, represents the interests of the Association, and is responsible for all the legal and regulatory aspects of the work of the Association. He is the primary contact for regulators and government bodies on bullion market development.

Ms Pawan Nawawattanasub

Ms Pawan Nawawattanasub

CEO
YLG Bullion Singapore Pte Ltd

Pawan is the CEO of YLG Bullion Singapore and founder of YLG Bullion International. She has almost 40 years of experience in the jewellery industry and established YLG in Thailand in 2003. In 2012, she brought YLG to Singapore. She sits on the Board of Directors of the Thailand Gold Traders Association, the Thailand Futures Exchange’s Arbitration Committee, and the Rotary Bangkok committee. She holds a master’s degree in Political Science.

SBMA-Shaokai-Fan

Mr Shaokai Fan

Head of Asia-Pacific (ex China) and Global Head of Central Banks
World Gold Council
Shaokai Fan is the Global Head of Central Banks at the World Gold Council, responsible for advising governments on gold matters, and enhancing the gold market through engagement, dialogue, and thought leadership. He works directly with central banks and sovereign wealth funds on investment considerations. Prior to this position, Shaokai held multiple roles at Standard Chartered Bank, including Director for Asia Strategic Initiatives and Associate-Director for Public Sector coverage. Shaokai holds a Masters of Public Administration from Columbia University and the London School of Economics, and an undergraduate degree in finance and economics from New York University.

SBMA-Committee-Alan-Liew

Mr Alan Liew

Head of Bullion & Commodities Trading
United Overseas Bank Limited
Alan is Head of Bullion and Commodities Trading for Group Trading in Global Markets, United Overseas Bank (UOB). Alan joined UOB and started the bank’s commodities trading business in 2014, previously he spent eight years in Standard Chartered Bank (SCB) trading both precious and base metals. During his tenure at SCB, he obtained the SGE gold trader licence and was part of the pioneering team for the SGE business and the FX quantitative trading team. Prior to trading, he worked for Monetary Authority of Singapore in the Financial Risk Management Division. He holds a BSc (Hon) in Computer Science at National University of Singapore and a MSc in Financial Engineering at Nanyang Technological University.

SBMA-Committee-Nikos

Mr Nikos Kavalis

Managing Director
Metals Focus Singapore Pte Ltd
Nikos Kavalis is a founding partner of Metals Focus. He has over 20 years of experience in precious metals, having previously worked for the Royal Bank of Scotland and GFMS. Since September 2019, Nikos has been based in Singapore, where he also runs the local subsidiary of Metals Focus.

SBMA-Committee-khun nuttapong

Mr Nuttapong Hirunyasiri

CEO
MTS Gold Global Trading Pte Ltd
Nuttapong Hirunyasiri is the CEO of MTS Gold Group, one of Thailand’s top 10 companies and top 3 bullion companies. He started MTS Gold Group’s first overseas office in Singapore and has been expanding the group business internationally. He focuses on product development and innovation for gold investment, with the aim of being a leader in providing the full suite of gold investment services in the ASEAN region.

SBMA Committee-Photo-Raman-Walia

Mr Raman Walia

Executive Director, Head of Commodities Sales – APAC
JP Morgan Chase Bank N.A.

Raman is Executive Director and Head of Commodities Sales, APAC, for J.P. Morgan. He joined JPMorgan in 2008 in New York, moved to Singapore in 2011, and helped expand the precious metals business in the region. Raman has an MBA from Cornell University, and likes to travel in his spare time.

SBMA Committee-Photo-Andrew-Clarke

Mr Andrew Clarke

Head of Brink’s Global Services
Brink’s Global Services Pte Ltd

Andrew Clarke is the Head of BGS (Brink’s Global Services) for Singapore, Indonesia, Malaysia and Brunei. He has held various leadership positions throughout his career in secure logistics and risk management with Brink’s, which started in Hong Kong in 2010. Andrew relocated to Singapore in 2018 to expand the precious metals line of business along with Brink’s portfolio of services and industries.

SBMA Committee-Photo-Kazuya-Naoki

Mr Kazuya Naoki

Head of Metals, Asia
ICBC Standard Bank Plc, Singapore Branch

Kazuya (Kaz) Naoki is the Head of Metals, Asia of ICBC Standard Bank in Singapore and is responsible for the precious & base metals sales and trading in the region. He joined Standard Bank Plc Tokyo Branch in 2008 and was relocated to its Singapore Branch in 2013 whose controlling stake was acquired by the Industrial and Commercial Bank of China in 2015. Prior to joining Standard Bank, Kaz spent 11 years focusing on commodity trading and risk management with Mitsui & Co in Tokyo, Sydney and London. Kaz has been serving on the SBMA Management Committee since 2016.

SBMA Committee-Photo-Vinh-Nguyen

Mr Vinh Nguyen

Head of Precious Metals, Asia
StoneX APAC Pte Ltd

Vinh Nguyen joined StoneX Group in Singapore at the beginning of 2008 and responsible for its APAC precious metals activities since 2019 until now.

SBMA Committee-KL-Yap

Mr KL Yap

General Manager, Singapore Refining Business Unit
Metalor Technologies (Singapore) Pte Ltd
KL YAP is the General Manager of Metalor Technologies (Singapore) Pte Ltd’s Singapore Refining Business Unit. He joined Metalor in 2013, initially in Refining Sales. In 2014, he became Refining Business Unit Manager, leading the development of a new precious metal refinery. KL was Vice Chairman of SBMA from 2017 to 2021, now serving as Chairman. With a degree in business commerce, finance, and marketing, he brings prior experience from refinery and heavy industries.