Following the mass market crash in 2020 many investors took their money from traditional stock markets and instead redirected their investments to gold and cryptocurrencies. It was only a matter of time before these two worlds merged, accentuating each other’s benefits. Let’s take a look at this top 5 gold backed cryptocurrency list.
What Is A Gold Backed Cryptocurrency?
Similar to a stablecoin that is pegged to the US dollar, a gold backed cryptocurrency is pegged to the precious metal. This means that when the price of gold increases or decreases, so too does the price of the gold backed cryptocurrency. This in turn drives down the volatility aspect usually present in cryptocurrency markets like Bitcoin and Ethereum.
Bitcoin has often been referred to as digital gold (even Litecoin is known as digital silver). In March 2017 the price of Bitcoin matched the price of gold in ounces and US dollars, instigating a surge of interest in commodity backed crypto.
Top 5 Gold Backed Cryptocurrency List
Similar to establishing reliable traditional gold suppliers, finding a reliable gold backed cryptocurrency can require the same effort and assessment. We’ve lightened the load and picked 5 of the best gold stablecoins on the market.
Tether (USDT) is currently listed as the third largest cryptocurrency based on market cap. As Tether is backed by the US dollar, and it was only a matter of time before the cryptocurrency unveiled a gold backed cryptocurrency. The XAUT token can be found on blockchains like Ethereum and TRON.
Each XAUT token accounts for a single troy ounce (31.10 grams) of gold based on one London Good Delivery bar of gold. The gold reserves are kept in a Swiss vault and investors are provided with the unique serial number of their specific gold bar, which they can look up through their website. Token holders can also request that their tokens be reimbursed with either cash or the physical gold, should they wish.
Reigning from Singapore, DigixGlobal created a gold backed cryptocurrency where each DGX token represents 1 gram of gold. The physical gold is kept in vaults in both Singapore and Canada, and are fully insured and accredited by the Bullion Association.
The platform wanted to widen access to gold and hence created this effective tokenized version that allows anyone, anywhere to own the commodity. It’s worth noting that while DigixGlobal incurs all storage costs, they do charge a 1% fee to trade the tokens for actual gold.
Pax Gold is issued by a trusted American company, Pax Standard (PAX) and was launched in September 2019. Similar to Tether Gold, each PAXG token represents one troy ounce of a London Right Delivery bar of gold. The gold is stored in Brink’s vaults, one of the approved storage facilities of London Bullion Market Association.
The creators of Pax Gold wanted to make buying gold more accessible, and have done so through a smooth and reputable digitized version. Each token holder receives full ownership of the respected portion of gold and can trade it worldwide through a number of exchanges accepting the ERC 20 token.
Offering a smaller entry point into the gold and cryptocurrency world is Gold Coin (GLC). The coin represents a fraction of 1 gram of gold, creating a much more cost effective solution to owning both gold and cryptocurrencies. Based on the Ethereum blockchain, Gold Coin was launched in 2013 by an anonymous entity and remains a fully functional, decentralized network. Gold Coin offers a reliable and trustworthy market entry point, and an opportunity to buy in small quantities until you are completely comfortable with the platform.
PMGT is one of the best gold backed currencies on the market and not only because it is officially validated (in both weight and purity) by the Australian government. Created by Western Australia’s Perth Mint, their tokens are backed by actual gold blocks and each token is accompanied by a digital gold certificate as proof (via the GoldPass app). Western Australia’s Perth Mint also incur all the storage, custody and insurance fees, providing a very competitive and cost effective alternative to other gold backed cryptocurrencies.
Gold vs Crypto – Why Not Have Both
In a world of increasing innovation, investors no longer need to choose between owning gold or cryptocurrencies, both are on offer. The world of commodity backed cryptocurrencies is flourishing, and as you can see from this top 5 gold backed cryptocurrency list, so are they. Get your hands on all things crypto through the simplified Oobit platform.