- Demand for gold-backed stablecoins rises
- COVID-19 pandemic has presented opportunities for investment
- Gold-backed stablecoins face trying times ahead
Cryptocurrency News Today – there is a new change in the digital asset market today and it may come as a surprise considering the situation of things recently. This time the report is that gold-backed stablecoins have started a resurgence.
This comes at a time when cryprthe ongoing COVID-19 outbreak that has hit the global financial markets. In what can be regarded as ‘opportunity in tragedy,’ many investors have started flocking to gold-backed stablecoins. They now prefer the later to actual gold. The current economic crisis caused by COVID 19 will unquestionably uncover alternative attractive investment options in the crypto space.
Stablecoins like Tether Gold (XAUT) and Paxos Gold (PAXG) are two of the preferred choices among investors and traders alike. Unlike the other gold-backed instruments, most gold-backed stablecoins are readily available on crypto exchanges. The two assets mentioned above are both supported by an ounce of physical gold. This implies that the owners of these coins can receive physical gold equivalent by exchanging either of the two tokens.
Coronavirus Offers New Investment Options in the Cryptocurrency Space
Gold has been a haven for investors in times of crisis. Now that the world is facing an unprecedented turmoil and economic downturn, many new investment opportunities have begun to emerge from unlikely places. This time is gold-backed stablecoins. It has become an excellent way for gold-backed assets are reimagined as tools for financial stability.
According to Roy Sebag of Goldmoney, the high demand for gold is naturally responsible to deal with any financial downturn. Different governments have reportedly responded to curtail the economic damage and panic casued by COVID-19. The U.S. Federal Reserve changed its rules suddenly after flooding financial markets in the country with helicopter money. This led to huge swings in the interest rates. As a response to this, investors looked for a safer alternative and it seems gold is now the answer.
Gold-backed Stablecoins to Experience Testing Times
PAXG has reportedly been purchased aggressively, which has led to double-digit growth figures in one week. So far, PAXG claims that they own appropriate physical gold that has been stocked to cover the ongoing enthusiastic buying pattern. Meanwhile, the situation with XAUT isn’t different. The demand has seen a rise recently, this has driven the cryptocurrency’s price significantly.
Tether recently released a statement stating that strong XAUT growth is going to inevitably strengthen its credentials as a top choice of virtual currency. As physical hold demand skyrockets, the regular digital coins will surely feel pressure regarding haven credentials. We can only wait to see how things will play out.