The cryptocurrency market has been a rollercoaster for the last year, but we believe that gold backed cryptocurrencies will bring some stability and profits to those who choose this investment.
To find out if you should invest in gold backed currencies, it is important to know what the future holds for them.
This article answers all of your questions about Gold Backed Cryptocurrency Investing along with key considerations and tips on how to find opportunities in this space
Gold backed vs USD backed cryptocurrency
Gold backed cryptocurrencies are pegged to the price of gold and thus have a fixed value. USD backed cryptocurrencies vary in their worth as they aren’t automatically linked to any currency or commodity.
In addition, there is no central bank that backs these currencies, which means that it’s impossible for them to have an intrinsic value like one would find with a gold-backed cryptocurrency.
Gold-backed cryptocurrency is becoming more popular due to its lower volatility and utility. With gold as a store of value, it has less correlation with other asset classes like stocks or bonds which are highly correlated in traditional markets. It’s also an attractive investment because the price will never go down below the amount that you paid for your purchase (unlike Bitcoin).
This form of digital currency presents companies with new opportunities to invest their funds into something outside of fiat currencies because they can be easily exchanged for gold.
Gold Backed Cryptocurrencies
A gold-backed cryptocurrency would not be backed by a government like USD. Developers have had an interest in creating a gold-backed cryptocurrency because they want to create the most secure and trustworthy digital currency that has the lowest volatility rate possible.
Gold-pegged cryptocurrencies are a type of cryptocurrency that link one token or coin to a specific quantity of gold. The baseline or minimum value for the token is always equal to the fixed amount of gold, which can be traded on an open market.
Gold-backed cryptocurrencies are digital currencies that have a backing of gold. They offer protection against the bottom dropping out of digital currency’s value and also provide an investor with physical possession as well as peace of mind.
However, investors should be careful to examine who stores the gold before investing because there is always risk associated with storing large amounts in any form. The value of these tokens falls if it becomes too easy to obtain gold from other sources.
USD Backed Cryptocurrencies
USD-pegged cryptocurrencies are like gold-backed digital currencies. The added risk of requiring the storage of large amounts of fiat currency is a disadvantage compared to other types of cryptocurrencies, which are not backed by any particular fiat currency.
There are two types of cryptocurrencies: digital currencies and tokenized assets. Digital currencies have a fiat-based currency behind them, like the US dollar or British pound. Tokenized assets, on the other hand, do not need to be backed by anything physical but can represent any asset (like gold bullion) if they use a blockchain as their “smart contract.”
Developers must offer a good reason to store assets in USD or digital tokens. However, market demand is always the same for USD and digital tokens, but it’s not always a good thing. Cryptocurrency enthusiasts are watching for developments that could make their money work harder.
Top Gold backed cryptocurrency to invest in 2022
AABB Gold token
AABB Gold is a cryptocurrency backed by gold. KYC process is required to purchase AABBG tokens, which are the only way to buy and sell them on the market.
The AABB Wallet is a secure mobile wallet that allows users to create an account and store their gold tokens. The app has one-click functionality, allowing for easy navigation. Once approved by an administrator, you can transfer funds anonymously to your AABB Wallet for easy use in buying and selling items.
The AABB Gold Token has 0.1 grams worth of spot price gold at its base value that’s divisible into 100 units while also having no upper cap or limit on supply unlike many other tokens.
Tether gold (Auxt)
Tether gold is a cryptocurrency that gives investors without a lot of money to invest in gold, direct exposure to the physical gold price. Tether features stability and transparency as two key characteristics of its design.
Tether Gold is a gold-backed digital asset, which gives investors access to ETFs and other traditional investments. It has a unique serial number, purity and weight of the allocated gold. Tether can be checked in at any time through its website or mobile application.”
- To purchase the tokens, users must create an account at app.tether.to and verify it. All transactions are conducted in US dollars.
- 1 XAUt token is equivalent to or symbolizes one troy fine ounce of gold in the form of a London Good Delivery bar.
- It is transferable across on-chain Tether wallets.
- The XAUt token is available as an ERC-20 token on the Ethereum blockchain and as a TRC20 token on the TRON network.
- For authenticated users and a certain minimum quantity of XAUt tokens, tokens redeemable for actual gold. The gold is delivered free of charge to any address in Switzerland.
- Tokens may be exchanged for gold, which the user can then sell and receive cash minus costs.
Perth mint Gold token
The Perth mint Gold token is a gold backed cryptocurrency with the ability to be exchanged for physical gold at a ratio of 1:1. The coin can be used as an alternative to fiat currencies and the blockchain provides instant liquidity for large transactions.
Perth mint Gold tokens are a perfect option for large and small investors. The token is transferable, divisible has no storage fees or transaction fees. It also provides access to liquidity with its fiat connection (which unlocks the ability to trade larger quantities).
- The token is redeemable for a variety of Perth Mint goods, ranging from modest 1 oz cast bars to 400 oz London Good Delivery bars approved by the LBMA.
- The Perth Mint exposes the balances of the Trovio’s GoldPass accounts, allowing anybody can independently verify the token’s gold backing.
- 1 PMGT is equivalent to 1 ounce GoldPass certificate, which is equivalent to 1 oz pure real gold. Exchanges can be made using Trovio.
- The tokens can be traded on the Over-the-Counter or OTC gold market, symbol XAU.
Meld gold by Algorand
Meld is partnering with Algorand to create a gold backed cryptocurrency. The digital currency will be able to provide liquidity and has the potential of bringing in billions through investments.
Algorand has designed a platform with both physical and digital gold transactions. The goal of the project is to create new markets, faster trading and settlement times for tokenized Gold on their platform.
Meld Gold wants to use blockchain technology in order to improve the gold market. The benefits are that it will be more efficient, transparent, and accessible for consumers.
- Purchaseable on OTC marketplaces and through Meld partners.
- The Algorand on which the tokens are produced allows atomic swaps and other capabilities associated with conventional asset tokenization.
- On an exchange, the token may be exchanged to any fiat currency or cryptocurrency, as well as back to gold certificates or actual gold.
Paxos Gold (PaxG)
Paxos Gold is a new cryptocurrency that promises to revolutionize the gold market. The Paxos team has been working on this project for over five years, and they hope to release it by 2023. Gold backed cryptocurrencies are not too popular yet, but they have potential and could be worth investing in.
This gold-backed cryptocurrency or token enables users to access high-quality gold from traditional markets. It was created through the ERC-20 protocol, which provides benefits like transparency and decentralization.
It lets you stay in control of how your money moves. The company’s goal is to provide liquidity and transparency for the precious metal, so they can create futures trading contracts with their own token.
Additionally, tokens are limited because of their size. Paxos Gold has a token that has 2 billion coins in circulation and only about 500 million have been released for sale on the market.
- At a 1:1 ratio, backed by one fine troy ounce of gold.
- Tokens are not subject to a custody fee. It is 19-40 basis points per year for the Major Gold ETF, 10-100 basis points per year for physical gold coins and other goods, 1-10 basis points per year for unallocated gold, and up to 100 basis points per year for other gold tokens. The LBMA charges a fee of 5-25 basis points each year for 400 t oz gold bars.
- Settlement is immediate.
- Access to major gold exchange-traded funds (ETFs), gold futures (COMEX), and other gold tokens, as well as the ability to retail gold coins, bars, and other items.
- Redeemable for actual gold.
- Regulated by the New York Department of Financial Services. Futures contracts are unregulated.
- Tradeable on Kraken, itBit, Alpha Bullion, and Binance, among other exchanges.
Anthem Gold is a gold-backed cryptocurrency. Each token is backed by 1 gram of physical gold, which makes it the best currency to invest in for people who want to diversify their portfolio with cryptocurrencies.
In the digital age, a company needs to have something that is tangible. Anthem Gold offers this with each token being fully collateralized with 1 gram of physical gold.
Aurus Gold (AWG)
AurusGOLD is a gold-backed cryptocurrency that is backed by 1 gram of physical gold in Cardiff, UK. The AurusGold team has been actively working with various financial institutions to create a secure and reliable trading platform for investors from any country. Aurus Gold is a diversified fund of real assets: gold, diamond, silver and real estate. Each token will be fully collateralized with 1 gram of gold.
Digital Gold is a cryptocurrency that has been around for almost as long as the internet. It’s idea was first thought of in the early 90s, but wasn’t widely accepted until it resurfaced during the dot-com boom and its success on exchanges spurred more interest.
Digital currencies have been around for quite some time, but there is a new gold rush happening in the crypto world. There are now coins or tokens that represent the value of physical gold (for example 1 gram of gold equals one coin).
Top Pick For You
Exchanges to buy Gold backed Cryptocurrency
The gold backed cryptocurrency is the next step for investors who want to take their investments to the next level. The gold-backed crypto project ensures that your funds are secure, because it does not rely on a third party such as a bank or an exchange.
Then, there are exchanges to buy Gold backed Cryptocurrency that provide a variety of features. These platforms allow you to trade as well as store them in safety and anonymity.
Moreover, these types of trading websites are available 24/7 so it’s easy for users to check the legitimacy of each platform they use while storing or conducting any type of transaction with their Gold-backed cryptocurrency holdings on the exchange homepage
Binance is the biggest cryptocurrency exchange in the world. It was founded by a Chinese man named Zhao Changpeng and provides trading services in BTC, ETH, BNB, LTC, and other cryptocurrencies.
With more than 1 million users from over 130 different countries across the world and over 100k transactions per second, it’s clear to see that this crypto exchange has taken off with speed.
This fast-growing company offers many unique features for investors like their “2FA” (Two Factor Authentication), which is an extra layer of security for your account. Binance also offers a referral program, giving you $10 per friend you refer who signs up and makes their first deposit.
This platform offers exchange-to-exchange trading so that investors can trade one crypto currency for another without the need to sell or buy in between cryptocurrencies. It is not only convenient but it can be done at a very low cost as well, usually ranging from 0% – 0.1%.
Binance has become the biggest cryptocurrency exchange in a short time, and it is constantly busy with trading volume. It supports over 190 different cryptocurrencies with plans to add more coins in the future.
Gemini, a crypto platform regulated by the New York Department of Financial Services, is a US-based exchange that allows for the trading of Bitcoin and Ethereum. Gemini has had an excellent performance in 2017 with their BTC/USD pair and USD market volume being on par with more established exchanges like Coinbase.
The Gemini exchange is also backed by real gold held in custody as part of its insurance policy to protect investors from losses due to hacking or other external threats.
The Gemini cryptocurrency exchange offers a variety of products such as its mobile app and custody platform. It is also backed by the USD, which makes it versatile for trading with other assets like gold-backed cryptocurrencies. The only downside to this crypto exchange is that it doesn’t provide anonymity because users have to share their identities in order to trade on Gemini’s platform.
Coinbase is one of the most popular cryptocurrency exchanges. They work with various cryptocurrencies and fiat currencies, including Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The company has been around since 2012 and was founded by Brian Armstrong and Fred Ehrsam in California.
Coinbase also offers a mobile app for iOS or Android devices that allows customers to buy digital currency through their Coinbase wallet.
In addition to being a cryptocurrency exchange, Coinbase also provides merchant tools such as merchant accounts so you can accept cryptocurrency as payment.
Coinbase is a popular cryptocurrency broker that offers beginners more than enough features. It’s reliable for those who are new to the industry, but it’s expensive and not beginner-friendly.
The documentation provided by Coinbase includes information about stable coins and other important topics in the crypto world like Bitcoin forks, etcetera — this allows traders to make educated purchases without fear of making mistakes or being left out in the cold with no idea what they’re doing.
Challenges of Gold backed cryptocurrency
It is interesting to note that the gold backed cryptocurrency has some of its own challenges because it’s not an easy task to peg a currency value with one single asset. Gold backed cryptocurrencies such as DigixDAO and Tether are becoming more popular.
These cryptos have been difficult to implement because the value of these coins is fixed with gold, which means they cannot be easily exchanged for other cryptocurrencies or fiat currencies.
The market reality implies that gold is not the optimal choice for the future currency, as most gold-backed stablecoin schemes have failed. This conclusion is explicable for the following reasons:
- A gold-backed stablecoin is a derivative of a price-sensitive activity and hence qualifies as a security.
- Millennials, or the new generation, do not and will not place a premium on traditional values such as gold, which they regard as a relic of the past.
- Today’s Bitcoin generations rely on cryptocurrency rather than gold coins to pay for their daily cappuccino or shopping.
- Gold has an almost limitless supply, which is not true of Bitcoin or other crypto assets that have a finite number of coins that can be produced.
- We do not know the precise (or even near to accurate) quantity of gold assets owned by governments, which are almost certainly not audited – the US bullion depository, for example, has never been audited.