Aofex

Will Crypto Backed by Gold Bring Wave of New Investors?

| Updated
by Julia Sakovich · 4 min read
Will Crypto Backed by Gold Bring Wave of New Investors?
Photo: Unsplash

Though cryptocurrency has always been an unstable asset available digitally, the gold-backing method can turn the tables for cryptocurrencies.

Cryptocurrency has been the rage in the market ever since it came under the limelight. Many investors have since tried their luck with this new e-currency, and the reaction differs from person to person. While some saw it as an opportunity, others are still not sure about something intangible.

Not only is it intangible, but there are also cyber risks to consider that increase peoples’ uncertainty with cryptocurrency. However, recent news in the market suggests that cryptocurrency may now be backed by gold. The result will give you the benefits of physical gold from liquid crypto assets.

While recreational investors have forever shown interest in cryptocurrency and actively participated, cautious investors have kept their distance and have simply observed. But after the news, the question that comes forth is – whether or not there would be a new wave of investors for cryptocurrency? Let us try and answer that question here.

What Are Gold-backed Cryptocurrencies?

Before we try to understand the impact it will have on investors, let us first clear our understanding of what a gold-backed cryptocurrency is. It is essentially a digital asset whose underwritten value is equivalent to the price of gold. This implies that for each gold-backed token of the cryptocurrency, the reserves should have the equivalent worth of a specific quantity of gold as tangible collateralized assets.

One great example of such gold-backed cryptocurrency is DIGau crypto. Released by Dignity Corporation, Dignity Gold has now entered the crypto world with its new currency – the DIGau crypto. With a stunning gold reserve of $6 billion, DIGau crypto is an e-current rated in gold.

Reports state that upon press release, if the number of gold increases, the backing amount of dollars will increase too and vice versa. The reason why DIGau crypto is comparatively more stable than the other crypto out there is because of the gold backing, which reduces its volatility.

So, that is what gold-backed cryptocurrency is all about. Given its stability, it is already showing great potential. DIGau crypto has not yet been released, but it has already managed to garner a great deal of attention. However, our main question remains – whether this new crypto will open a new door for investors or not.

How will It Affect Investor Behavior?

As mentioned earlier, investors have always had mixed reactions when it comes to cryptocurrency. Because of its intangible state and instability, not many investors have had the certainty to invest in it. However, the story changes when we consider gold-backed cryptocurrency.

Unlike general cryptocurrency, this type carries a tangible worth in the form of gold. Therefore, it is not easily affected by severe price fluctuations. Due to their nature and tangible worth, investors who were uncertain about cryptocurrency are finally willing to step forward with interest.

Along with tangibility, gold-backed cryptocurrency has another advantage that is extremely appealing to investors. It can easily be divided into smaller parts and shared with other parties. Hence, cryptocurrencies backed by gold are preferred by investors.

Therefore, considering all these factors, the market will observe a huge shift in investor behavior for cryptocurrency. More and more investors will now have the confidence to invest, thus welcoming a whole new wave of investors to cryptocurrency.

Gold-backed Cryptocurrency – Wrapping Up

Though cryptocurrency has always been an unstable asset available digitally, the gold-backing method can turn the tables for cryptocurrencies. More and more investors will now show interest in investing as there is a tangible and physical worth to it. Cryptocurrencies such as DIFau Crypto will become more popular among investors.

However, there are always exceptions. Even if crypto-currency is backed by gold, general investment behavior for cryptocurrency will still take years to develop.

The concept of cryptocurrency itself is vague for many people, and the intangibility does not help. So even if gold-backed cryptocurrency has the potential of bringing in a new wave of investors, it will take time for it to be normal.

If you are an investor and are looking for investment opportunities in cryptocurrency, the safest investment would be in gold-backed cryptocurrency. Rather than investing in the general type, this type is a good place to start from.

Work It
Julia Sakovich
Editor-in-Chief Julia Sakovich

Having obtained a diploma in Intercultural Communication, Julia continued her studies taking a Master’s degree in Economics and Management. Becoming captured by innovative technologies, Julia turned passionate about exploring emerging techs believing in their ability to transform all spheres of our life.

Related Articles