Cryptocurrency

How Can Gold-Backed Cryptocurrencies Offer Stability to The Current Investment Landscape

Cryptocurrency is no longer a trend or an emerging innovative technology that will become available sometime in the future. It is here now, and it is here to stay. Indeed, it is still quite a new field, and advanced developments appear constantly. This being said, more and more companies have become confident in creating unique and up-and-coming cryptocurrencies. Gold-backed cryptocurrency is one such virtual currency that brings some stability, especially in the current investment landscape and to new inexperienced investors. 

The reason why investors prefer this new digital currency is that it is a hybrid cryptocurrency. This means that it can enjoy the benefits and features from both parts, in this case, gold and crypto. When it comes to this gold-backed cryptocurrency, its tokens can keep the potential for price appreciation from not just one but two markets. 

Due to highly volatile investment markets and disrupting events in the last decade, novice investors are more cautious than ever. If a few years back, experienced and amateur investors alike were more willing to take risks, nowadays, they have changed their approach. 

The same applies to cryptocurrency investors. Perhaps, there is even more reason to be highly cautious when it comes to cryptocurrency, given that it is still such a new market. When the first cryptocurrency appeared, and for some time afterwards, many people began erratically investing in it. Learning from these early mistakes, investors are now cautious about how they invest in cryptocurrency. Strategies are taken based on risk assessment while taking into consideration the state of a specific digital currency at the time of investment. 

Gold-backed cryptocurrencies are the ones many investors choose in today’s investment landscape – but why is that?

What is gold-backed cryptocurrency?

Gold-backed cryptocurrency is a digital currency whose coin or token is backed by physical gold. This means that the price of its token is linked to the price of gold. So, their value is equal, no matter the rate change. With this advantage, but the fact that you use digital tokens and not real gold, storing and selling are more straightforward and easier to do.

The development of this type of cryptocurrency was influenced by the fact that it is more stable compared to other existent digital currencies available on the market. Its stability is given by the fact that this cryptocurrency mirrors the price of gold. You might ask yourself why this stability happens. 

Compared to other types of crypto, whose value is speculative, the fact that the gold-backed cryptocurrency is linked to a tangible asset makes it more reliable, stable and better equipped to handle price fluctuations. This is one of the reasons why investors prefer it. 

Why do investors prefer gold-backed cryptocurrency?

Investing in cryptocurrency can be highly risky. There are definitely more risks involved than trading stocks, for example. It might be because it is still a relatively new market and investors or traders are in the process of learning effective strategies. As a result, in the beginning, many people rushed into investing in cryptocurrency and lost a significant amount due to recklessness and lack of information on this market.

But ever since more cryptocurrencies have been developed and individuals have become more acquainted with this market, investors have better knowledge of how to invest and what type of currencies are preferred. 

Legitimate gold-backed cryptocurrencies are such an option, provided they have a solid backing. For instance, AABB Gold Token, created by Asia Broadband Inc. (OTC: AABB), is a cryptocurrency entirely backed by gold. Not to mention, this is definitely a viable option for investors.

How many gold-backed cryptocurrency projects are there in 2021?

People interested in buying or investing in gold are usually worried about how to hold the gold physically. Whether it is because of the geographical location or how to store it safely, there is no denying that it is a significant disadvantage. For this reason, gold-backed cryptocurrency is the safer option. So, the demand for creating this digital coin was there. 

Currently, there aren’t many companies that have created a genuinely gold-backed digital currency. However, this year has revealed some promising ones. Among those, there is the AABB Gold Token, which is 100% backed by the gold the company itself – Asia Broadband Inc. – extracted from their mining operations. Over the years, gold has proven to be a commodity to withstand its value during some of the most financially difficult periods of time, like a recession. Linking this with cryptocurrency, a secure, decentralized network based on blockchain technology, makes gold-backed cryptocurrency one of the most stable and accessible digital currencies.

What does the future of gold-backed cryptocurrency look like?

One thing is sure. Gold-backed cryptocurrency is here to stay thanks to its stability as well as the fact that investors have the opportunity to access blockchain apps. Unlike fiat currencies and other cryptocurrencies that are not backed up by a commodity, gold-backed cryptocurrency is ideal for investment, given the price fluctuation is not as significant.

Having said this, there is no denying that the future of gold-backed cryptocurrency is bright. The current investment landscape looks promising, with investors choosing this solid and reliable asset in a market that can be highly volatile. Plus, the fact that there is a gold-backed token eliminates entirely the investors’ concern of how to store gold.

Final words

With more and more companies developing a cryptocurrency that is completely backed by a commodity, in this case, gold, individuals can invest with the certainty that it is not one of the riskiest methods. Indeed, any investment action has its strategy. However, it is good to know that there is a digital currency that is more stable than others. 

AABB Gold Token was created by Asia Broadband Inc. and launched in March 2021. It is 100% backed by gold from the company’s mines in Latin America. It can be purchased from the AABB Wallet app and will soon be available as a proprietary exchange, meaning you can choose to exchange the AABB Gold Token for other cryptocurrencies, should you decide this. 

Angela Scott-Briggs

Editor, TechBullion.com | Interested in Innovations in Business, Finance, and Technology .

Share
Published by
Angela Scott-Briggs

Recent Posts

David Black: An Winning Career in Finance

David Black joined StreetAccount in 2003 shortly after graduating from college, where he received a…

6 hours ago

Omaha Entrepreneur Vinod Gupta Turned A Garage Full of Yellow Pages into A Multi-Million Dollar Enterprise

“Vinny, you gotta get these books outta here by five or I’m gonna fire you.”…

11 hours ago

6 Important Things You Should Know About Marketing

It's crucial for any business owner to understand what marketing is and to learn how…

11 hours ago

An Overview of Services Offered By Press Release Writing Services

With the advancements in technology, there is a lot of competition in the market. There…

12 hours ago

Bitcoin Network Difficulty Raised to 26.64T, How to Reduce Mining Costs?

The data showed a 9.32 percent increase in difficulty on the bitcoin network and a…

13 hours ago

Audit Management Software by Harrington Group International

Auditing is crucial for evaluating how well an organization is fulfilling or complying with industry…

13 hours ago