Can Crypto tokens backed by real gold replace physical gold bars?
The world of capital investment has become more diverse than ever. Digital markets are opening new opportunities for lucrative and profitable investments, and it seems that cryptocurrencies have become quite attractive trends, especially among the younger generation. However, traditional and experienced investors often stay away from this channel. In many ways investing in cryptocurrencies is an investment in an unknown future. We rely on market behavior that we have not yet fully comprehend and in many ways, participate in an economic experiment.
On the other side of the barricade, stands one of the oldest investment channels in the world. Trading in precious metals has served as a stable investment channel for thousands of years and even today, it is the domain of the most cautious investor. After all, gold is a material that I can hold in my hand. Its value is not derived from political policies, regime stability or financial fluctuations – it serves as a valuable raw material that can always be converted into value, whether a natural disaster, total war or collapse of regimes and economies has occurred. For many investors, it is an insurance policy.
Now, blockchain technology opens up new possibilities for investors and combines the flexibility, security and ease of use that cryptocurrency provide with the stability and security of gold. Gold-Backed Crypto Currency, also known as Stablecoins, are just in its initial point. However, the tremendous potential inherent in them makes them a channel that is important for us to get to know closely.
Gold remains a relevant investment in 2022
Many experts in the world of finance now predict that the value of gold is expected to rise in the coming years by hundreds of percent and reach up to 10 times its current value. Wall Street is also presenting bullish forecasts today for the value of gold that will continue the steady rise we have been experiencing since 2018. The Covid-19 crisis, tensions between China and the US and instability in Europe are fueling unprecedented liquidity in the economy and gold has become more attractive than ever.
How does Stablecoins make gold investments more lucrative than ever?
Faced with the huge wave of inflation and the high volatility of cryptocurrencies, gold is becoming more inviting than ever. However, this investment channel also has many challenges. Even those of us who hold hundreds of grams or even a few ounces of gold may find that they now have thousands of dollars problem on their hand. Gold trade, its transport outside the country’s borders and carrying entail many complexities. First, there is of course the heavy taxation aspect that makes any use of gold bars and especially their carrying on international trips unprofitable. Second, there is always the fear that gold will be robbed and unlike other and more secure investment channels – from the moment our gold is stolen, the investment is lost forever.
However, there are many other events that may make our ownership of gold more challenging than ever. Most of us would not want to carry thousands of dollars’ worth of gold in order to make a deal. In addition, we will not always have quick and direct access to our safe. Given the fact that an investment that is supposed to serve as a lifeline in extreme moments of crisis, it is important to remember that many hostile eyes can covet the gold and therefore, the need for a direct and secure solution is critical.
Now, a new investment path is opening up opportunities that were previously impossible even for gold investors. To protect against the growing fears of inflation in the capital and crypto market, many investors have turned to leading entities in the crypto field and especially to commodity-focused enterprises backed by commodities. The growing need for a more flexible, secure and liquid solution for investing in precious metals has created new digital currencies whose value is linked to the value of gold and silver. For investors who need a sense of security and are acting cautiously, gold-backed tokens offer an optimal combination of gold stability and the smart trading options of blockchain technology.
How does it work?
Now, currencies like AWG will allow gold holders to issue digital coins against their gold. For example, a person holding a kilogram of gold could issue a thousand coins worth a gram and deposit the gold in the hands of a third party. Now, you have a digital means of storing the value of the investment that can be paid with digital tools, split it and divide it easily, preserve its value close to the gold value and even enter into investments in gold in any initial amount
Aurus Technologies has established a revolutionary ecosystem that allows you to enjoy a user-friendly, secure and flexible digital channel for trading precious metals. With advanced technology and deep and many years of knowledge in the field of precious metals, we help you harness the tremendous power of digital currency for the most traditional and stable investments.
Ami Gur , Tradinovation project, A. G. Metals Ltd.