ZoneBitcoin EditorialIf you have decided tobuy gold on sites like GoldenAvenue, you are certainly attracted by secure investments. Investing in gold has always been considered the ultimate investment in a crisis. It is even with real estate, the typical investment of the "good father of the family".
For what? This is explained by the increase in the price of gold almost every year. This also explains the fact that it remains an asset accepted throughout the world and which remains the ultimate safe haven. In periods of bear market or high volatility, many investors invest in gold to protect themselves against inflation in particular.
If you are also interested in investing in cryptocurrencies, then you should know that today, it is certainly possible to buy gold with cryptocurrencies but it is also possible to buy indexed cryptocurrencies directly. on gold. This is then a way of combining the advantages of cryptocurrencies with those of gold. In fact, no pun intended, this is like buying cryptocurrencies that are worth gold (literally).
You did not know it? Well, discover in this article the 5 best cryptocurrencies backed by gold.
1/ Paxos Gold (PAXG)
This is probably the most well-known gold-backed cryptocurrency. New York-based Paxos Trust Company was one of the first to issue a gold-backed cryptocurrency. The PAXG token is issued on a 1:1 ratio. This means that each PAXG token is backed by a troy ounce of gold validated by the “London Good Delivery”. The gold in reserve of Paxos Gold is stored in the Brink’s vaults in London.
This is a ERC-20 token originally created on the Ethereum blockchain. The itBit company that manages Paxos Gold is based in the United States and Singapore. Thus, the company is regulated by the NYDFS.
You can buy Paxos Gold on the majority of exchange platforms such as Binance, Kucoin or bybit. It is still recommended to buy some on the platform directly and to pass the KYC. This way, you will have your title deed and you will even be able to find your acquisitions by providing your Ethereum address directly on the site.
2/ Tether Gold (XAUT)
You certainly know the stablecoin USDT (Tether) which is now the most used by cryptocurrency traders. In 2020, the company behind Tether also created a gold-indexed cryptocurrency: Tether Gold (XAUT). The XAUT token is indexed to one troy ounce of gold at a 1:1 ratio. Be aware that the »Troy ounce is the standard unit of measurement for precious metals set by London.
XAUT is available under the ERC-20 (Ethereum) and TRC-20 (TRON) standard.
Tether Gold is today the largest gold-backed stablecoin in terms of marketcap. Tether Gold's gold is stored in a vault in Switzerland controlled by the company.
However, the two tokens are not legally similar. This is because XAUTs are issued by a different entity TG Commodities Limited. This is because gold is a raw material that enjoys specific international jurisdiction. Thus, the holder of the XAUT token will have ownership rights over the gold he owns through the XAUT.
It is possible to buy XAUT on the best cryptocurrency exchanges.
By purchasing XAUT token on the official Tether Gold website, it is even possible for verified users to exchange them for physical gold. The physical gold is then physically delivered to the holders, for a shipping fee.
4/ The KAU of Kinesis Money
This is the latest gold-selling cryptocurrency that we've discovered and clearly it's an application that we use heavily today. The great particularity of Kinesis Money is to offer us not only a cryptocurrency backed by gold (KAU) but also generally a 15% return on our assets. This allows us to passively earn money (or gold).
The KAU cryptocurrency is an ERC-20 token, hosted on Ethereum. The GoldCoin ratio is backed by gold at a ratio of 1 to one ounce of gold.
The KAU token differs from the other gold-pegged cryptocurrencies we have mentioned so far because the company behind it has experience in the gold industry for over 10 years. It is in fact the company ABX based in Australia and which manages the gold funds of institutional clients which launched Kinesis money. The KAU token is mined by users, which immediately gives them the right to title to the blockchain.
5) Meld Gold on Algorand
The Meld Gold token was launched by the Algorand blockchain to allow investors to benefit from a cryptocurrency indexed to gold. Again, Meld Digital Gold is backed by physical gold in the 1:1 ratio.
The Meld Gold Token can be a very interesting token in terms of fees and transfer because the fees on Algorand are low, compared to the fees on Ethereum (especially during periods of high usage).
Holders can store it on a wallet compatible with the Algorand blockchain. The Meld Gold token can then be converted to fiat, crypto, exchanged for a gold certificate or even physical gold.
What is a gold-backed cryptocurrency?
A gold-backed cryptocurrency is, as its name suggests, a cryptocurrency that has the value of the price of gold. So, if the price of gold increases, then the price of the crypto indexed to gold will increase too. The opposite is also true. There are several gold-backed cryptocurrencies and some can even be exchanged for physical gold.
It is possible to buy cryptos indexed to gold on the majority of exchange platforms. Some stores also accept this type of cryptocurrency as a means of payment.
Finally, some gold-backed tokens also offer additional features and benefits, such as access to traditional financial assets such as ETFs.
How does gold-backed crypto work?
Basically, a gold-pegged cryptocurrency means that for every cryptocurrency, there is a reserve of gold. It all depends on the ratio used by the cryptocurrencies. For example, some cryptos are backed 1:1 for a gram of gold while others are backed 1:1 for an ounce of gold. These reserves are managed by the companies issuing the cryptocurrencies but can be held by third-party companies. Indeed, the gold market is particularly well regulated and managed by established institutions which manage the safes in which the gold is located.
To create gold-backed crypto, it must then be issued by a company that owns (directly or indirectly) physical gold in vaults.
What are the advantages of buying gold-pegged cryptocurrencies?
👉 Storing gold without the drawbacks
The first advantage of buying cryptocurrencies indexed to gold is that it is then possible to own gold without its disadvantages. In other words, it is then possible to own gold without having to have to store it at home, which is a source of stress and high risk if a burglary occurs. This explains why people who buy physical gold in large quantities must generally store them in specific vaults with the supplier. This comes at a price. This is why buying cryptocurrencies indexed to gold is more economical.
👉 The possibility of reselling them more easily
Of course, it is possible to sell your gold at any time on dedicated sites like GoldAvenue for example. Remember that in general, it is better to sell your gold where you bought it.
👉 Divisible and more easily transportable
Unlike physical gold, they are digital and can be divided into smaller quantities. This makes gold-pegged cryptos more easily transportable and transferable.
👉 Invest in a safe haven
Some people invest in gold-backed cryptocurrencies to combine the benefits of cryptocurrencies and gold. Thus, they can benefit from transaction facilities, greater liquidity while having a crypto backed by a tangible asset which is gold. This prevents them from the volatility of certain cryptocurrencies.
What are the disadvantages of investing in a gold-indexed crypto?
The biggest risk is the trustworthiness of the company issuing the cryptocurrency. It is very difficult to know whether companies actually have the appropriate “reserves.”
To avoid this risk, it is then important and essential to only choose established companies that have partners with companies working in gold and gold storage. You don't improvise performance overnight in such a sector. It is then towards recognized companies that we must turn.
The other risk is that even though we are talking about a safe haven, the price of gold can nevertheless fall. This is true for all investments, remember.
Final word: Investing in gold via cryptocurrencies is a (good) compromise
By reading this article, you may be able to conclude that buying gold-backed cryptocurrencies is like investing in gold, in a simpler and more practical way.
Investing in gold is indeed becoming more affordable for smaller budgets. Likewise, it facilitates the liquidity needs that one may have.
Do you prefer the video format? Here is the YouTube version cryptocurrencies that are worth gold (literally)
This is not investment advice. Always do your own research. Only invest amounts you are willing to lose.
To buy cryptocurrencies (simple way):
- Public chat Binance (Complete crypto trading platform)
Generate interest on your cryptocurrencies:
- Public chat Youhodler (Earn up to 12% interest)
To secure your cryptocurrencies:
To have fun and play
- The best for Esport and Bitcoin sports betting : CloudBet
[…] The 5 best cryptocurrencies that are worth Gold (seriously) […]