Last Updated on February 15, 2024 by Ben
The Gold-Backed Crypto initiative is a new project that has been introduced to the public. Gold-Backed Crypto is a digital currency that will be backed by physical gold, which means that you can own these coins without needing to store them on your computer or phone. The Gold-Backed Crypto team believes in the future of this technology and is excited for what it will conduct to society as a whole. If you want more information about Gold-Backed crypto, click here!
What is a Gold-Backed Cryptocurrency?
A gold-backed cryptocurrency is a digital asset whose value is supposedly underwritten by the equivalent price in gold. Each gold-backed cryptocurrency has a coin that is worth a certain amount of gold. For example, one token might be worth 1 gram of gold, and another might be worth 10 grams of gold. Make sure to keep this money with a trusted person or company to avoid getting lost.
Some tokens backed by gold allow people to take the tokens and change them into gold. Most cryptocurrencies are not backed by something real like gold. This means that they will go up and down in value quickly. To protect against this, you can buy a token that is backed by gold. The majority of gold-backed cryptocurrencies exist as ERC-20 standard tokens. But some, such as Paxos’s PAX Gold, are not.
The blockchain is a digital thing. It has money on it. If you desire to be safe, you can put money on the blockchain. If your country’s currency falls or if other people make new rules, then your money will be okay because it is on the blockchain and not in your country’s currency or in someone else’s bank account.
Digital versions of gold are better than their physical counterparts because they can be divided into any amount you want. You can then send them to someone else.
Gold-backed cryptocurrency is a type of digital money with a value based on the price of gold.
Most digital coins don’t have a physical value, and their value is only based on what people think they are worth. Gold-backed cryptocurrencies can be worth both money and gold.
We understand what makes the price of gold go up and down, but it is hard to know what will make Bitcoin’s price change. When the cost of gold goes up or down, the value of gold-backed cryptocurrencies also changes.
How do these digital coins work? With gold-backed cryptos, coins are provided with corresponding values to the value of gold. For example, one coin equals one gram of gold. A trusted person, who is usually an independent third party, stores this gram of gold. They trade it with people who have coins.
The value of gold-backed cryptocurrencies will never go below the value of gold. This provides them with stability. But the value of these coins may rise higher than the value of gold.
The stop-loss feature in digital currency is what makes people with a fear of risk feel safe when they invest in gold-backed coins.
People can invest in gold-backed cryptocurrencies, but they need to know that there is a risk. If you invest in physical gold and it gets lost or stolen, then your investment will be lost. This is different from digital currency because if people change their minds and delete or take their currency out of the system, the money still exists. It is not easy to know if the gold exists and if it is stored in a secure place. Make sure that you can own the gold and that it will be stored in a secure place before you buy the coin.
Is Bitcoin a Gold-Backed Cryptocurrency?
Bitcoin is not a metal-backed currency, but it has become popular in recent years. People buy gold with Bitcoin.
Bitcoin is a digital currency that does not have any physical form. Gold-backed cryptocurrency came before Bitcoin in 1999, but people didn’t start using it until after Bitcoin came out in 2009.
People who trade coins can invest in gold-backed cryptocurrencies. This is because when Bitcoin grew in popularity, people were allowed to exchange coins more often.
Some Well-Known Gold-Backed Cryptocurrencies
Anthem Gold (AGLD)
Anthem Gold is a company that provides tokens that are each backed by one gram of physical gold. The gold is insured and stored with someone who is not a bank.
The new coin was launched in April 2019. It is available on the Anthem Gold Edge Wallet.
Cash Telex (CTLX)
Cash Telex coins are linked to a fund that includes gold, silver, diamonds, and real estate. The fund changes over time.
One Cash Telex gold coin is equal to one gram of gold. All of the gold is hidden and safe in a vault. It is also insured and audited, and you can see it with your own eyes.
This is a kind of money that is backed by gold. Gold is valuable. This cryptocurrency can be exchanged for gold if you want to buy it later. It also has insurance, which means that your money will not go away.
All Cache gold coins are publicly verifiable. This means that people can see how many they have and where they are at all times. There is a market cap of $2.9 million for these coins.
DigixGlobal is a company in Singapore that provides Digix gold tokens, which are worth one gram of gold.
The gold is in vaults in Canada and Singapore. The gold is covered by insurance from the Bullion Association. It has a market cap of $6 million.
Gold Coin (GLC)
This gold coin is worth a fragment of one gram of gold. That means it can be very affordable to buy. Investors can also invest in this coin little by little, so it is a good investment for the long term.
GLC has occurred on the Ethereum blockchain for a long time. It is one of the safest investments on the market. The latest price GLC was $0.0030449.
Perth Mint Gold Token (PMGT)
This gold-backed cryptocurrency is one of the most popular on the exchange platforms. The Australian government guarantees its purity and weight in gold blocks from Western Australia’s Perth Mint. And, if you want a certificate, you can get one from a company called GoldPass. PGMT coins are backed by certificates with a 1:1 ratio.
A trader can trade tokens for other tokens, or they can get their coins back and trade them in for gold. The current market cap is nearly $1.5 million.
Tether is a currency that can be traded for dollars. Sometimes people want to trade for gold instead of dollars, so Tether created another currency called XAUT. One XAUT is worth one troy ounce of gold.
The gold is in vaults in Switzerland. You can find out which gold bars are yours by looking at the serial number. If you want to take the gold home, you can get it back with cash or physical gold.
XAUT tokens are found on blockchains like TRON and Ethereum. The current market cap stands at around $50 million.
Other noteworthy gold coins include:
- DRCG Coin
- Guardian Gold
- Troy Gold
The Benefits of Gold-Backed Cryptocurrency Tokens
Investors might be interested in gold-backed crypto because they can use it to save money to spend in the future. They can also use it if their country’s currency is not worth anything. People who want to buy gold can purchase it in different ways. They can choose to buy gold bars or coins. They can also invest in a fund that has gold backing it up, or they could invest in allocated gold in a vaulting service. Gold-backed crypto is different than other ways to back cryptocurrency. Gold backs the coins, and people trust it.
Easy To Sell And Withdraw
First, when you buy gold-backed crypto, it is much easier to sell and withdraw than retail bars and coins or vaulted gold. For example, an investor can sell their crypto for ETH very quickly using a decentralized exchange like Kyberswap. He can trade in his ETH for cash when he has already set up a crypto broker. He can send it through Paypal or ACH transfer.
Some crypto brokers also offer debit cards, which means that you will be able to spend money right away. This is hard. You must package the coins and send them to your dealer. Then you need to buy insurance for them in case they are lost or stolen. After sending the coins in the mail, you need to wait for your dealer to receive them, verify that they are real, then send you a check for them.
Then, the investor can get access to the money he needs from his savings. There are companies that make this process easier. These include GoldMoney and BullionVault. The gold is already stored in a vault, so the investor can immediately sell it and be credited with the cash. However, the difficulty is when the user tries to withdraw some of their cash.
Many times, people have restrictions on how much they can withdraw. For example, BullionVault will hold your money for 90 days if you first deposit it by ACH transfer. If a person has less than $2,000 worth of metal in his account, GoldMoney only permits him to withdraw using high-priced wire transfers. Gold crypto solves these answers by enabling the person to sell his gold to any buyer using an ordinary cryptocurrency wallet.
Available In Small Denominations
You can buy gold in small denominations. If you have less money, you can still buy something. This is different from buying stock shares because they are not divided into fractions. So the smallest amount is one share. Most gold ETF shares are priced from $16 to $158. Coins are also difficult to buy in small amounts, with 0.1 oz (around $168 worth) being the most widely sold small coin.
Most importantly, gold-backed crypto is more convenient for people who use crypto. To buy an ETF share, a user needs to open a stock account with a brokerage. To buy gold, the user must first open an account at the service. That requires filling out paperwork, uploading a photo ID, and dealing with other hassles. If you have an account with a centralized crypto exchange, then you can buy gold crypto. You do not require to sign up for another account. You can also buy it anonymously using a decentralized exchange and your Ethereum wallet. Gold-backed crypto is better than other ways to invest in gold. There are some coins that you can use to invest in gold.
Gold-backed Cryptocurrency Directory
This is a list of different coins. Some coins are backed by gold. This is not an endorsement, so make sure you research all of the coins before investing in any one of them. Some of the cryptocurrencies listed here don’t detail how they store and account for gold. You should be careful to refer any questions to their social media channel or forum listing.
Investing in Gold-Backed Cryptocurrencies
People buy gold when they have a lot of money, and people also buy gold from countries that back their currency with gold. People buy gold because it is a long-term investment. Gold is famous because it is stable and doesn’t change much, even during economic failures.
Digital gold is a new form of money. This is because it’s backed by gold. It’s been around for a while, but it became popular when blockchain tech was invented. This kind of money is not a dollar. It does not have a central bank or nation behind it but is traded and exchanged across the borderless world of the internet.
When you are fancying about investing in a gold-backed cryptocurrency, it is important to think about some things. You need to make sure that your investment will be profitable.
Some questions to ask yourself are:
- Do you know what investing in cryptocurrencies means? They are like money, and they can be used for buying things. But some of them can be backed by gold, which is a kind of metal.
- Do you know how to choose gold-backed altcoins?
- Do you know how to find a trusted crypto exchange?
- Is this gold-backed cryptocurrency worth what people say it is?
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A gold-backed cryptocurrency is one that has actual gold. The value of the coin is based on the amount of gold it contains. Usually, coins with more gold will have a higher price.
When you buy a gold-backed cryptocurrency, the price should be close to the spot price of gold. If it is not, then your investment might be a scam.
Gold-backed cryptocurrencies are a hot topic in the investing world. With so much popularity, it can be hard to tell if this investment is right for you. To help decide whether or not gold-backed cryptocurrency is worth your time and money, consider what type of investor you are before making any decisions.
Are you looking for long-term stability with an investment that will grow over time? Do you want more risk but would like short-term gains? These questions should give you an idea of how to proceed with your gold-backed crypto investments overall.