Gold-Backed Stablecoins To Unite Precious Metals And Bitcoin Investors: Crypto Research Report


In a recent publishing by the Crypto Research Report, gold backed tokens (stablecoins) offer the best hope for the two constantly warring parties to make peace. Bitcoin enthusiasts such as Anthony Pompliano will finally be able to get along with gold bug Peter Schiff. No more targeting adverts from Grayscale and the end of the #Drop Gold campaign. However, of the tens of gold stablecoins available on the market today, only a few are expected to survive the market.

Mirror, Mirror On The Wall…

Bitcoin believers have always held (HODL’d) the idea that the digital asset is a better store of value compared to gold. The pioneer cryptocurrency is seen as the digital heir to the precious metal as a store of value and safe haven asset in times of geopolitical and economic uncertainties.

The ‘correlated’ rise in prices for both assets in the first half of the year (gold registering its highest price in 9 years, Bitcoin reaches a high of $14, 000 USD), has led a number of crypto traders to believe “the demand for gold is adversely affected by the success of cryptocurrencies.”

This is however not the case as the report showed the correlation to be low.

https://sfo2.digitaloceanspaces.com/engamb/wp-content/uploads/2019/09/02182652/2-1-768x563.png

The correlation between gold returns and Bitcoin returns is still pretty low.

Bitcoin bullish run dies out, gold’s gradual growth

As the year wore on, the bullish momentum of BTC’s price died out crashing the price to lows of $9,100 USD. Gold bars have maintained a gradual growth of price through the year to $1500 USD per ounce today. Despite BTC growing over 200% in the year, the volatility experienced on its price is the cause of lower investment demand to gold.

In a bid to ease out the two safe haven assets, gold backed stable coins provides a middle ground by combining the advantages of gold’s low volatility and Bitcoin’s ease of storage. However, gold backed tokens are still trading in low volumes as no crypto exchange is licensed to offer gold backed stable coins exchange traded funds.

In conclusion the report warned investors’ to be careful while investing in such assets as most of them will die out in the coming future. The report read,

“There are over fifty gold-backed coins currently, and most likely, many of them will fail. It will take a few years for the market leaders to emerge, gain widespread exposure, and thus secure the standing of gold-backed tokens as a store of value.”

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