What To Know Before Investing In Gold Backed Crypto

Are you interested in investing in the crypto market but feel uncomfortable placing your money into entirely digital currencies? If so, you’re not alone. Cryptocurrencies have gained popularity in recent years, though many people still struggle to wrap their heads around the concept of these digital assets.

Luckily, you have another option that combines the security of physical assets with the convenience of digital trading and storage. Gold-backed crypto is a digital asset representing real precious metals, meaning that you can own a digital coin in place of actual, valuable gold.

At the Oxford Gold Group in Beverly Hills, California, we want to help you make the best decisions with your money. Unlike digital or paper currencies, investing in precious metals can secure your hard-earned savings.

Below, our experienced team will discuss everything you need to know about gold-backed cryptocurrency so that you can invest wisely. Call us at the Oxford Gold Group today at 833-600-GOLD if you’d like to learn more!

What Is a Gold-Backed Cryptocurrency?

Gold-backed cryptocurrencies are digital coins that have a physical gold value associated with them. For example, a particular coin might equal the same value as one gram of gold. Whenever gold market values fluctuate, the coin’s price fluctuates as well.

Non-gold-backed cryptos usually rise and fall on a whim. It’s difficult to predict when or why these digital coins skyrocket or plummet in value. With gold markets, you can understand the fluctuations much more easily.

When you purchase coins, a bank or third-party custodian will store your physical gold assets representing the number of coins you own. When you buy, sell, or trade coins, your trusted gold holder will make the trade for you so that you can manage your digital wallet without needing to store or transport heavy, precious metals.

Gold-backed cryptocurrency will never plummet beneath the current market value for gold, though occasionally, it might jump higher. Since gold is a relatively reliable investment, you shouldn’t face any unexpected crashes.

Why Was Gold-Backed Cryptocurrency Created?

stack of several gold coins

Gold-backed currency is a way for governments to stabilize their economies. In 1879, the United States began backing the US dollar with gold to combat inflation. Eventually, the government could no longer support this system, though silver and gold’s value remains.

Investors saw this opportunity of linking physical assets with their investments and created the concept of gold-backed cryptocurrencies.

Gold-Backed Crypto Benefits

Investing in gold-backed crypto rather than stocks or traditional cryptocurrencies offers many benefits, including:

  • Stability: Gold is one of the most stable assets you can invest in. Since gold-backed crypto directly follows gold values, you can enjoy peace of mind knowing that your investment won’t crash like other less-predictable options.
  • Predictability: Understanding or attempting to predict stock market price fluctuations is challenging and requires ample research and knowledge. Many people only find success with non-gold-backed cryptocurrency by accident. Luckily, gold trends are easy to understand and predict.
  • Easier storage: Rather than stacking up bars of gold in your house, you can safely store the assets in a secure location.
  • Digital trading: You can manage trading online from convenient apps without needing to touch the gold or set foot in a bank. All the reputable platforms feature top-notch security enhancements so your information stays safe.
  • Better exchange rates: When trading through banks globally, you sometimes have to deal with fluctuating exchange rates. With digital trading, you can avoid this inconvenience.

Is Bitcoin Gold-Backed?

No. The popular cryptocurrency, Bitcoin, is not backed by gold. Bitcoin is an entirely digital cryptocurrency whose value solely depends on demand—the more people interested in it, the more it’s worth.

Bitcoin gained so much attention in recent years because of its explosion in value. In 2009, the digital currency was worth less than a penny, but by April 2021, its value reached $63,558. Many people who owned a few dollars’ worth of digital coins found themselves with thousands or more in profit.

Since Bitcoin has no physical asset, it is far less stable than gold and can crash. While you may not see the above growth with gold-backed currencies, you can depend on steady and reliable value.

The Best Gold-Backed Cryptocurrency Options

tether coins with dollar bills at the bottom

When investing in gold-backed crypto, you have quite a few options. Each currency varies in value, offering different pros and cons depending on your goals. Some of the top choices in the market today include:

  •       Tether is a USD-backed currency that now has a gold-backed option called XAUt. Each XAUt is valued at a single troy ounce worth of gold with a minimum purchase amount of 50 XAUt, costing around $90,000.
  •       Perth Mint Gold Tokens are digital versions of GoldPass certificates with a one-to-one ratio, meaning each token equals one certificate, which equals one ounce of gold. The Western Australian government secures and backs the gold storage at the Perth Mint’s central bank. You can easily trade this currency online using the GoldPass app.
  •       DigixGlobal, or DGX, offers digital gold tokens worth one gram each. The Bullion Association ensures the precious metals in vaults in Singapore and Canada. With DGX, you can invest in portions of a coin so that you don’t need to fork out an entire life’s savings to join the gold-backed crypto club.
  •       Paxos Gold is a company in Singapore that offers digital tokens with one-to-one ratios, meaning each one is worth a troy ounce of gold. The benefits of this route include instant transactions, easy access, and many trading options.
  •       Gold Coin GLC is an excellent option for beginner investors who want to start with smaller amounts. One GLC is worth less than one gram of gold, so you can buy it at a low price.
  •       Anthem Gold is another option for buying coins valued at one gram of gold each. The company stores the physical assets in a secure vault that you can view live from their website.
  •       Cash Telex coins allow you to link your digital currency to various assets, like gold, diamonds, real estate, and silver. If you choose the gold route, one coin would equal one gram of gold.

If none of these options sound right for you, don’t fret. You can also consider:

  •       Cache Tokens
  •       Aurus
  •       DRCG Coin
  •       Airgead
  •       Troy Gold
  •       Guardian Gold

Should You Invest in Gold-Backed Cryptocurrency?

When deciding whether or not to invest in a gold-backed cryptocurrency, you should consider your personal goals and how much you’re willing to risk. If you want to make a ton of money fast and don’t care about risking your funds, you should consider another option. If you’d rather invest in stability for your future, gold might be an excellent choice.

If cryptocurrency sounds too complex, you can also consider investing in gold and silver IRA accounts. Such opportunities allow you to convert your money into higher-yield assets without risking economic ups and downs.

Secure Your Future with the Oxford Gold Group

When you’re ready to secure your future by investing in gold or silver, contact our experienced team at the Oxford Gold Group in Beverly Hills, CA. We can walk you through all your options, like gold-backed crypto, and help you build the best plan for your financial success. Call our team at the Oxford Gold Group today at 833-600-GOLD, or fill out our online form to learn more about your choices.

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