Sprott Inc. · TSX:SII
Sprott — Conference Presentation (October 2017)
26 slides from Sprott's conference presentation, October 2017
Slide 1: Cryptocurrencies: New Gold or Fool's Gold?
Cryptocurrencies: New Gold or Fool’s Gold? October 2017
Slide 2: Featured Presenters
Featured Presenters Edward Coyne Executive Vice President, National Sales Sprott Asset Management USA Mr. Coyne joined Sprott in January 2016 and has more than 23 years of investment management and sales experience. Previously, he was a Principal and Investment Specialist at Royce & Associates for o
Slide 3: Sprott Asset Management
Sprott Asset Management Sprott is a global asset manager providing investors with access to highly-differentiated precious metal and real asset investment strategies, backed by three decades of experience. We manage more than $7 billion in precious metals and real assets, and offer best-in-class
Slide 4: How Should Gold and Cryptocurrencies be Classified?
How Should Gold and Cryptocurrencies be Classified? Long-Term Investments or Speculative Assets? Money? Stores of Value? 3 Sprott USA
Slide 5: 2017: The Year of Cryptocurrencies
2017: The Year of Cryptocurrencies A highlight of 2017 financial markets has been the explosive interest in cryptocurrencies. Bitcoin has consolidated its position as the dominant cryptocurrency (roughly 50% market share). Bitcoin’s success has spawned a legion of competitors. Bitcoin’s stro
Slide 6: Long-Term Investments or Speculative Assets?
How Should Gold and Cryptocurrencies be Classified? Long-Term Investments or Speculative Assets? 5 Sprott USA
Slide 7: Gold: Long-Term Investment or Speculative Asset?
Gold: Long-Term Investment or Speculative Asset? Spot Gold Price Performance (6/4/13-10/16/17) [Bloomberg] 6 Sprott USA
Slide 8: Bitcoin: Long-Term Investment or Speculative Asset?
Bitcoin: Long-Term Investment or Speculative Asset? 7 Sprott USA
Slide 9: Is Gold Money? Is Bitcoin Money?
How Should Gold and Cryptocurrencies be Classified? Is Gold Money? Is Bitcoin Money? 8 Sprott USA
Slide 10: Gold: Money?
Gold: Money? For billions of people, Gold is a preferred medium of exchange and store of value. Sovereign Gold coins are freely exchangeable into local currencies in most countries. Central banks have been increasing allocations to Gold in monetary reserves. Gold is increasingly utilized by
Slide 11: Bitcoin: Money?
Bitcoin: Money? Only 3 of the 500 largest Internet retailers currently accept Bitcoin for payment (down from 5 in 2016). Overstock.com, Expedia, PayPal accept Bitcoin; Amazon, Apple, and Wal-Mart do not. Bitcoin enthusiasts sponsor petitions to retailers to accept Bitcoin. The Amazon petition ha
Slide 12: Bitcoin: Money?
Bitcoin: Money? A typical Bitcoin block (nearly 1MB) includes roughly 2,000 transactions or about 3 per second. VISA processed 82.3 billion transactions in 2016 or 2,610 per second. Energy consumed by VISA data centers equated to 50,000 U.S. households vs 1.6 million for Bitcoin. Bitcoin use
Slide 13: Gold and Bitcoin as a Store of Value?
How Should Gold and Cryptocurrencies be Classified? Gold as a Store of Value? Bitcoin as a Store of Value? 12 Sprott USA
Slide 14: Are Gold and Bitcoin Stores of Value? Similarities
Are Gold and Bitcoin Stores of Value? Similarities Limited Supply vs. Fiat Outside Traditional Financial System Somewhat Immune to Central Bank Policies Fringe Role as Money 13 Sprott USA
Slide 15: Are Gold and Bitcoin Stores of Value? Differences
Are Gold and Bitcoin Stores of Value? Differences Infancy Immutability Volatility Safety & Trust Scale 14 Sprott USA
Slide 16: Differences: Infancy
Differences: Infancy Gold enjoys 5,000 years of history as unparalleled store of value. Bitcoin is viewed as the undisputed market-leading cryptocurrency in an emerging technology called the blockchain. Remember: Netscape was once the undisputed market-leading browser in an emerging technology
Slide 17: Differences: Immutability
Differences: Immutability For 5,000 years an ounce of Gold has been exactly the same: an ounce of Gold. There are no variations, imitations or substitutions. Central banks favor Gold for its extraordinary density and rarity, and do not hold diamonds or fine art due to their infinite variability.
Slide 18: Differences: Volatility
Differences: Volatility Contrary to popular understanding, Bitcoin ownership is extremely concentrated, with 4.11% of Bitcoin “addresses” controlling 96.53% of outstanding Bitcoins. This means that 95.89% of Bitcoin addresses are trading just 3.47% of outstanding Bitcoins. These parameters exp
Slide 19: Differences: Volatility (cont.)
Differences: Volatility (cont.) This graph portrays the percentage declines of the 50 leading cryptocurrencies in the three weeks ending 7/16/17. No asset class experiencing broad based declines between 40% and 70% in a three-week period should be confused with a store of value. 18 Sprott USA
Slide 20: Differences: Safety & Trust
Differences: Safety & Trust Gold offers a range of safekeeping options, from safe-deposit boxes to impenetrable bank vaults; in contrast, Bitcoin still presents significant hurdles for true safekeeping. Gold is an investment asset with a strong legacy of trust and oversight. Bitcoin enables a
Slide 21: Differences: Scale
Differences: Scale An intellectually attractive aspect of Bitcoin’s design is its strictly limited supply; hard-caps circulation at 21 million units (currently 16.6 million). This scarcity value, however, does not apply to competing cryptocurrencies, which now number 1,150 (and growing). While
Slide 22: Are Gold and Bitcoin Stores of Value? Differences (Gold vs. Bitcoin)
Are Gold and Bitcoin Stores of Value? Differences (Gold vs. Bitcoin) Infancy: Gold 5,000 years vs. Bitcoin 2009 Immutability: Central Banks vs. Silicon Valley Volatility: Widely held vs. Concentrated ownership Safety & Trust: Strong legacy of trust & oversight vs. methods still evolving Scale: Gold
Slide 23: Gold Moves into the Modern World
Gold Moves into the Modern World Sprott partners with TradeWind Markets to digitize and modernize Gold through IEX’s exchange technology. TradeWind is a technology company developing a platform solution for physical Gold. Blockchain allows custody of Gold to live in the digital world through t
Slide 24: Summary
Summary Gold continues to be an effective long-term investment and a proven store of value. Bitcoin is an interesting idea as a speculative trade and cannot replicate gold as a store of value. In the current environment, gold should be viewed as a mandatory allocation in any well diversified i
Slide 25: Disclaimers Terms
Disclaimers Terms This presentation is intended solely for the use of Sprott Asset Management USA Inc. for use with investors and interested parties. Investments, commentary and statements are unique to this strategy and may not be reflective of investments and commentary in other strategies managed
Slide 26: Disclaimers Terms: Sprott ETFs
Disclaimers Terms Sprott ETFs An investor should consider the investment objectives, risks, charges and expenses carefully before investing. To obtain a Statutory Prospectus, which contains this and other information please contact your financial professional, visit http://www.sprottetfs.com/documen