Bitcoin has long been seen as a resource that rivals gold as a hedge during stock volatility. Tents to zigare when the zag market is scarce but in known quantities, and is easy to store, track and transfer.
When the stock market closed its quasi-decade beep last month, gold futures rose 4% and mining companies increased. However, unlike gold, the value of Bitcoin did not offset the stock market. Instead, he followed his trajectory closely – losing 4% of his value during the month.
Q3 letters of hedge funds, conferences, palettes, etc.
Interestingly, Bitcoin is experiencing one of the less volatile periods in recent history. Its value has been around $ 6,500 for most of the year, moving further away from the other tokens and showing that it is a class of assets in its own right.
Meanwhile, the appetite for the crypt remains strong. Investors want many of its most valued features, including its usability, security, autonomy. Therefore, it should come as no surprise that a new class of cryptocurrencies, asset-backed tokens, are becoming so popular.
Real Digital Gold
The asset-backed tokens derive their value from the price of real assets such as gold, currency or real estate and act as a captivating combination of physical assets and cryptocurrency. As a result, asset-backed tokens are becoming the ultimate safe haven asset.
While it is surprisingly easy to buy gold, storing it in significant quantities or selling it for a profit is incredibly difficult. After all, it is a dense metal that is difficult to manage in the digital age. Furthermore, the market is clogged with intermediaries that mediate the purchase and sale of gold for a substantial fee.
Taken together, these features do not make gold a realistic investment for the average person.
In contrast, an asset-backed token is tradable as a security or a Bitcoin, while providing investors with access to a commodity that can protect against volatility in other markets.
For beginner crypto-investors, these asset-backed tokens are an entry point that deals with family markets. The average investor may not be familiar enough with Bitcoin to invest in the digital currency, but commodity-backed commodities such as gold, currency, and real estate are recognized investment vehicles that are recognizable to the average investor.
In other words, tokens with gold are a digital expression of gold. They are a modern version of a timeless product.
Forbes has described asset-backed tokens as "the holy grail of cryptocurrencies" and are playing an increasingly important role in the investment ecosystem. In addition, they help investors diversify their investments, an essential component of a sound investment strategy in turbulent times.
For investors already involved in the stock market or other investments in cryptocurrency, gold is a diversifying asset that can offset the volatility of the market in other areas. Since stocks and other cryptographic assets have shown similar levels of volatility, gold stands out as a safe haven that can isolate investors from strong price fluctuations.
The asset-backed tokens stand out from other investment opportunities thanks to their hybrid approach to investment. Users not only gain access to the burgeoning world of cryptocurrencies, but come to do so with the stability of a consolidated commodity. When these two work in tandem through a verified process of validation and transparency, they create the ultimate safe haven investment.
While the stock market and other investment vehicles that have skyrocketed during this ten-year run begin to show signs of fallibility, more investors will look to gold as a thoughtful investment, but this time, those gold could be coins. It's an obvious and modern approach to a timeless investment methodology.
About the author
K. C. Chng, the founder and CEO of Digix. Digix is an asset tokenisation company set up in Singapore in 2016, with the physical gold on the Ethereum blockchain, DGX, which is its first product. It aims to democratize the access to gold for the masses.