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Gold and bitcoin are taking a pounding, but copper is holding steady. Copper is not a monetary metal. Where gold stores value, copper measures industrial activity. Its price reflects whether factories are expanding, electricity grids are being upgraded, and infrastructure is being built.
Connie Bloem, CEO of Mesh.trade, says copper’s price is seen as a proxy for real industrial activity and that makes it of interest for investors.
Lithium gets the battery narrative, gold is a monetary story, and rare earths are tied to geopolitical events. Copper, on the other hand, carries the weight of the entire energy transition at scale.
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Your normal investment route into copper is via copper stocks or ETFs – or, for the more adventurous, via futures and options. But you can now buy tokenised copper on the blockchain.
Tokenisation is the process of converting something of value – such as copper, gold, stocks or bonds – into a digital token on a blockchain, explains Bloem.
“Mesh also recently listed [tokenised] gold and we also have silver. And what we’ve discovered in the market is there’s a gap – you can either get these through ETFs or mining stock, but people very seldomly get a direct access to the underlying commodity or the underlying metal.
“And copper is such a fantastic asset because it is a driver of the industrial economy and the energy economy.
“And being South Africans, we are acutely aware of what is going on in the energy economy because we have such we’ve had such instability within our energy sector. It’s a no-brainer for us to put it [copper] as part of our portfolio offering.”
Tokenised copper on Mesh is 99.9% London Metal Exchange investment grade.
It gives investors direct access to the metal for as little as R50 rather than going through a copper mine or ETF.
One of the big advantages of tokenisation is the ability to gain investment access to metals like copper, gold and silver without the hassle of storing or insuring them.
You are not buying the physical metal itself, but a digital investment that can be broken into tiny fractions. This makes it accessible to retail investors of limited means, says Bloem.
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What tokenisation brings to retail investors is a range of products not previously accessible, such as the ability to invest in SMEs. Mesh recently launched an interesting yield-bearing note offering prime plus 3% over five years.
The underlying companies are SMEs, or more precisely, equipment financed for SMEs that pay monthly rentals. Things like coffee machines. The company behind this is Pretoria-based Commercial Credit Solutions, which has shown that financing equipment for SMEs can be stable and profitable.
Bloem says tokenisation is clearly the future of investment.
“We’re seeing more and more assets being tokenised, which is the first trend. It’s not going to stop. This is definitely going to take over what we now know as the capital markets or the financial markets. The financial markets are going to run on the tokenised base.”
Tokenisation allows for a level of customisation not previously available in the market.
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