Investors have had a variety of opinions on the volatility of cryptocurrencies. Some like the price swings as they create opportunities for huge profits. Others have found that this makes for an investment that is too risky. With differing solutions, stablecoins and, more specifically, precious-metal-backed cryptocurrencies were seen as the clear path forward. The concept of precious-metal-backed cryptocurrencies is not new. In fact, E-gold, a virtual coin backed by Gold, was around long before Bitcoin. Although the currency no longer exists, many companies have followed in its footsteps to provide stablecoins for Gold and a host of other precious metals.
These stablecoins are all backed by the underlying precious metal and will never fall below the underlying asset price, making them a “more secure investment.” To begin investing, traders must carefully determine which coin they are interested in purchasing as not all exchanges will have a precious-metal-backed cryptocurrency available.
1. GoldExchange
Gold Exchange is a cryptocurrency exchange platform that is specialized in trading gold-backed cryptocurrencies. It is known as the largest exchange of its kind globally and has over 20 years of experience in the industry. On Gold Exchange, investors can easily purchase stablecoins with their debit or credit card with safety, security, and anonymity.
Gold Exchange also offers a wallet app for users to store their currencies safely. Unlike real Gold, there are no fees associated with storing the asset or ensuring the security of it.
2. PalladiumCoin
For users interested in investing in Palladium, the digital Palladium Standard PalladiumCoin is available on the Ethereum network. Each Palladium coin is 1/1000th of an oz of 99.9% palladium. Each coin is audited and can be viewed by investors with full transparency online. PalladiumCoin is available for purchase in exchange for bitcoin on the official PalladiumCoin website, palladiumcoin.com.
3. Coingecko
CoinGecko is a cryptocurrency exchange specializing in its altcoin offerings, which include many precious metal-backed stablecoins. CoinGecko has a number of great resources, including newsletters, reports, and guides to educate new users. The website currently offers Tether Gold (XAUt) and Paxos Standard.
4. SilverCoin
SilverCoin is a fractionalized silver-backed asset available for purchase by fiat money or cryptocurrency. Each SilverCoin is 1/100th of an oz of 99.9% pure silver, which is fully backed by physical silver stored in a secure vault and fully audited. Investors can purchase SilverCoin directly from their official website, silvercoin.com.
As another ERC-20 coin, SilverCoin can be stored in an Ethereum supported wallet.
5. PlatinumCoin
PlatinumCoin is a platinum-backed ERC-20 token based on the Ethereum network. Each PlatinumCoin is the equivalent of 1/1000th of an oz of 99.9% pure platinum that is stored in the company’s secure vaults. Payments cannot be blocked or limited due to the immutable nature of blockchain technology.
6. Coinbase
Coinbase is the largest cryptocurrency trading platform in the United States and one of the largest platforms in the world based on traffic alone. As a result, the platform has both high liquidity and trading volume. The platform has a slightly more complicated fee structure that is based on a flat fee and may include a variable fee depending on the payment type. Coinbase offers many precious metal-backed stablecoins, including Perth Mint Gold Token (PGMT). PGMT is backed by physical Gold that is stored at The Perth Mint in Australia.
7. Bittrex Global
Bittrex Global is a cryptocurrency exchange known for its wide selection of altcoins and for the fact that it is an easy-to-use platform for beginners. The exchange itself has had a few complaints about its customer support but still remains a widely used platform across the United States. Its wide usage is likely the main contributing factor to its slow response times. The platform offers the gold-backed cryptocurrency, Cache.Gold.
Investors must continue to do the necessary research before choosing which precious-metal-backed stablecoin will make the most sense with their existing portfolio. Research can be conducted through the project’s website and whitepaper to ensure their assets are audited and secured by a legitimate third party.
Another factor that should be considered is the ease with which bullion can be redeemed for the underlying tokens. In some cases, a difficult process may be an indicator that the project is illegitimate and can lead to a loss of funds.
Carolyn Coley is a blockchain reporter. She joined Smartereum after graduating from UC Berkeley in 2018.
