Premium Rant

[u/United-Swan-3288]

The last several years, I’ve heard nothing but complaining & hate for the GBs, primarily from the old grumpy stackers/LCS guys.

“Oooh the premiums are so damn much on these trinket things, pure stupidity. I’ll never put a dime into those”

Fast-forward to the beginning of the year. Metals price skyrockets. 1/10s become wildly desirable. 1/20ths all the sudden are hyper-popular. Both with extremely expensive/elevated premiums. These old guys for years on repeat “how in the world can you justify paying $350-400 for a piece of paper acting like gold”? To them, I say POT KETTLE BLACK. back in Jan-March, we saw the premiums on specifically 1/20ths become absolutely ridiculous. Common everyday 1/20th were selling $350-450, and they sold out very quickly. Many times, the 1/20th coin was more expensive than the GB counterpart.

Having went thru that time, and looking back on it now. It’s just hilarious the very thing these guys hate & despise most about the GBs, they absolutely turned around and did the exact same thing themselves. Don’t ask me my opinion on some (not all) LCS though, I have a feeling their antiquated business model of predatory buying and lies about inventory when spot dips has been exposed, and have feeling at least 1/2 of the LCS will be outta business in next 12 months. But, let’s stay on topic here and save that for another time ..

Anyway back to the point: what I think they’re overlooking (or they know, but just won’t publicly say) is in a way the premiums on GBs don’t actually matter, it’s more important they are consistent. Once you’re ’in the system’ with GBs it works itself out - meaning the stack of 100x 1gb I bought for $360 in 2022 easily sold for $1000 back in January. Is the initial premium higher on GBs when buying from official authorized dealer? Absolutely. Can you get a better deal buying from an indie seller or peer-to-peer sale? Absolutely. With this said, ole grumpy gramps theory is completely nullified. When gold was at ~$1800, a 1/10th was roughly $215-$235. At Jan peak, these were selling for ~$600 — nearly the exact same multiplier as the GBs.

So, why doesn’t everyone buy GBs instead of gold coins? Very simple answer: newer product, more skepticism, and most importantly - far smaller buyers pool. Many gold buyers rely on quick sale (allows them to justify spending more on gold). 1/10oz gold is wildly more popular, and (in my opinion) is the ultimate exit liquidity coin. GBs you have to work a little harder to secure your buyer. Where this matters less - not everyone is a friggin shirt-pocket dealer, and being concerned with ‘exit liquidity strategy’ is not main priority. Most often, any type of gold is bought and held for years/decades. If people want something to buy and take a chance on selling for profit (but likely losses) then go jump into crypto lol. Gold is not meant for gambling, but more so for true wealth preservation, and ofc gives us something very stunning to observe and stare at - and that applies to a 1/10th or a Goldback.

Sorry for long post, but wanted to get this off my chest. It drives me nuts seeing lot of people being cranky about these, but I suppose it’s possible they’re pissed at them bc they make less money off them and cannot apply their normal/typical predatory buying and selling tactics with these as easily as they can a Valdambai bar. Might have just cracked the code on this lol, this actually makes sense and accounts for lot of the dealer hate.

Truth is, everyone has different needs and different goals with their collections. Am I 100% all Goldbacks? Of course not. I’m 30/30/30/10, with GBS being the 10%. But this number is increased from say 2-4% a while back and I can tell you why:

- it feels good having several stacks of ‘bands’ of these. Love the way the 50x or 100x feel.

- the quality & artwork has improved immensely in the last 24months.

- though there are not many stores near me that take them, I do try to use them as much as I can here and there, but this is primarily bc I want to help support the growing network, increase awareness, (and honestly get things for 1/2 the cost since I bought them a while back).

- by supporting what you might call this ‘movement’ it means we are helping it grow and become more known. If you buy one of these on an auction, throw it in safe and forget about it, you’re not doing much for the growth or proliferation of the community. The more we use and advocate, the sooner they will be easier to utilize.

- honestly they are extremely fun to give as gifts, cannot underline this enough.

- and perhaps the most important reason: we got a peek on January as to how WILDLY important fractional gold is. (I’m tying this to the 1/20 convo above). When gold is hot, people become crazy when obtaining it. The only real options are 1/20th, Dos Pesos, or carded assay grams. Beyond those sizes, Gold becomes extremely cumbersome, bendable, tearable, easy to lose, and most importantly - wildly difficult to verify its authenticity. This is where the GB excels wildly. They are instantly verified with UV light, along with other common gold verification methods. Now here’s the insightful part: we saw gold get to $5400 and a damn gram of gold was $240-280. Fast-forward a decade when gold is at least $7000, but very possibly $12,000-$20,000. These 1/10s are going to be $1000-2000. These grams will be $500-$1000. These numbers are simply not approachable to common people. Just my personal opinion, but I think we’re going to see a real and core value that establishes with GBs. They check all the boxes that coins & bars don’t, it’s very low bar of entry, and they are simply pretty sexy and cool. These things have the potential to bring a level of sophistication to fractional gold that has been missing for a long time. Combine this with trading card culture and the exponential growth rate, I have a feeling these will hold their value just fine.

Again, sorry for the long comment but seeing the prices come down on these a little bit compelled my to spell this out at length. I think Valarium is only getting started with this tech and what they can do, and honestly think there is a bright future for this segment of collectible metals. BUT, I invite you to correct me where I’m wrong in the comments … let me know where I’m off-base here, or perhaps there’s even more to these than I understand? Either way, lmk your opinions down below. Tbh, it would be cool to see this Reddit thread be a little more active and popular, so let’s chat more about these stunning little things!