The start of 2020 has been pretty rocky with the increase in the geo-political tension rising in the middle east, the breakout of Coronavirus which has killed more than 130 people so far. Investors, on the other hand, have started dumping their stocks and have started investing in gold-backed crypto tokens. As the world is reeling with new problems every day, the prices of BTC and gold have soared high since the beginning of 2020.
Gold has always been considered as a safe-haven asset, but it seems BTC and other cryptocurrencies will fall in the same bracket. With the recent developments, people have started investing their money in cryptocurrencies that are backed by gold. Despite numerous failures of gold-backed crypto tokens in the past decade, there are 77 such projects active right now.
Interest in gold-backed crypto tokens
With 30 failures in the past decade, people are skeptical if the gold-backed crypto tokens will be able to gather the interest they seek. It’s not just these 77 projects. There are more such projects which are set to launch this year itself. The best example would be Tether, which has announced its own stablecoin, XAUT.
Andreas Ruf, CEO of Infinigold said that the value of gold along with the security of blockchain feels like a ‘perfect marriage’. Both assets are scarce, secure and low-risk which makes gold-backed crypto tokens a great asset to invest in at the time of misfortune.
Steve Ehrlich, CEO of Voyager Digital has also recommended the stablecoins by saying that there’s nothing not to like. Stablecoins possesses the benefits of bitcoin minus its volatility. They are ‘cost-efficient and more appealing to the investors as well as the institutions’. However, Nick Hill, VP at Invictus Capital believes that fiat-backed stablecoins have an edge over the gold-backed as it provides interest to the depositors which is in-fact a better model.
Featured image from Pixabay
