Inflation Is Boosting Interest In Gold Tokens

www.investing.com/analysis/inflation-is-boosting-interest-in-gold-tokens-200586443

By Martin Petkov | Jun 16, 2021 08:21AM ET

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The Bitcoin rally of 2020 was caused by institutional investors who expected the U.S. dollar to lose value. The cryptocurrency is still seeing a 300% profit year-over-year, but its recent setback has pushed some investors’ interest towards tokens pegged to gold.

Despite the optimism of U.S. Federal Reserve Chairman Jerome Powell, inflation continues to grow above market expectations, hitting 5% year-over-year in May.

Image source: Investing.com

Prices are rising on everything, including food, construction materials and real estate. Meanwhile, some industries are experiencing a labor shortage, which is causing wages to grow. That, in turn, is further accelerating inflation because workers are earning more and thus spending more on services and products.

Image source: tradingeconomics.com

A number of investors are scared of Bitcoin’s volatility, preferring tokenized gold instead. Gold tokens are issued in the ERC-20 standard, which gives them protection and a high degree of cryptographic protection. Until recently, the token issued by Tether was in the leading position before institutional demand pushed PAX Gold to first place.

Image source: stormgain.com

PAX Gold was issued in September 2019 by Paxos, a company licensed by the New York Department of Financial Services. According to data compiled by Arcane Research, the token’s capitalization sits at over $263.3 million.. Every purchased token is backed by physical gold and is held separately from the company’s assets.

Image source: coindesk.com

Investors are looking for ways to protect themselves against inflation. One traditional way of doing so is by investing in gold, which has more liquidity and smaller commissions compared to an unallocated metal account (UMA).

Inflation growth will cause another rally in the precious metals market, and the 3,000% growth gold tokens have seen over a year and a half confirms the interest in this asset class.

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Bashir umar Jun 18, 2021 6:00PM ET

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I want to sell my bitcoin if you want just chat me up

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Bashir umar Jun 18, 2021 5:57PM ET

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more bit coin investment

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US 30	30,851.5	-116.3	-0.38%
US 500	3,817.3	-14.1	-0.37%
Dow Jones	30,967.82	-129.44	-0.42%
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Crude Oil WTI	99.92	+0.42	+0.42%
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Gold	1,765.40	+1.50	+0.09%
Silver	19.163	+0.042	+0.22%
Copper	3.3950	-0.0200	-0.59%
US Soybeans	1,448.12	+9.12	+0.63%

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Direxion Daily Junior Gold Miners Bull 2X Shares	31.45	-3.99	-11.26%
iShares Silver	17.73	-0.58	-3.17%
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Inflation Is Boosting Interest In Gold Tokens

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