Since physical gold has a track record of protecting investments, investing in it is always a good idea. In fact, people rely on gold at times when other assets are instable. For example, gold is a popular investment among people who want to protect themselves from the negative effects of inflation. Gold is also popular when there is turbulence in global equity markets, political unrest or political tensions between powerful countries. What’s more, since gold is available all over the world, you’re likely to get it at similar prices in different places.
People have been investing in gold for centuries, and you don’t need to be a financial expert to invest in gold and protect your wealth. While people historically invested in physical gold, it is now possible to invest in gold in an electronic format. This can be a useful option if you don’t want to worry about the costs of storing your gold safely.
How can investing in gold be beneficial for your wealth?
It preserves wealth
Unlike the dollar which loses value over time, the value of gold has only gone up over the years. For this reason, if you had $50, then investing in gold is more beneficial than keeping it in the bank. After all, the dollar is affected by inflation while gold isn’t. In general, any paper currency from any country in the world will lose value over time whereas the value of gold only goes up.
It can act as a hedge against the dollar
Historically, during periods of inflation, investors move their money into a gold asset that has proven its stability across generations. As a result of this increased demand, the value of gold actually increases during inflation. As investors sell their dollars to buy gold, its value increases dramatically.
It’s a good way to save money for the future
When you start earning an income, it’s important to get into the habit of putting some of this money aside for the future. However, you can’t invest in real estate or government bonds without a significant amount of money. On the other hand, putting your money in a savings account exposes you to the same effects of inflation that you’d typically prefer to avoid when investing. The easiest way to invest small amounts of money is by buying gold from a bank or from the market. In both cases, make sure you have an idea of the quality of gold you’re investing in. This is especially important when you’re buying from the market. A bank will usually provide a quality certificate so you don’t have to worry that you might be buying low-quality gold.
It’s accessible
Gold has been sold across the world for centuries. You don’t have to struggle to find genuine gold. On the contrary, there are several places you can go to when you want to buy gold. While it’s very easy to buy gold from that next-door jewellery store, it’s always important to make sure you’re buying from trusted jewellers. By doing so, you can rest assured that you’re buying genuine gold.
It is liquid
Investing in gold is a safe option because it’s always in demand. Moreover, you can usually get cash on the spot when you decide to sell your gold to the next person. If you don’t want to sell your gold, you can also pledge it to a bank in return for a loan. Many people do this with their gold jewellery and family heirlooms. This is a good option if you want to be able to buy your gold back in the future.
It doesn’t depreciate with time
No matter how old your gold gets, you will be able to fetch the same amount of money that you would if you sold new gold. As a result, gold is a safe place to store your wealth. Whenever you decide to sell it on, you will get the market price for gold at that moment in time.
You can easily hand it over to the next generation
Gold is a popular family heirloom, handed from one generation to the next at milestones like weddings. Since gold doesn’t fade with age and has intrinsic value, this can make a great gift for your children and, in turn, their own children.
How gold can be used in the cryptocurrency space
Several factors contribute to Bitcoin’s value, including its applications as a payment system, its limited supply, and, most importantly, its decentralization, without which the other qualities would lose their appeal. Nobody can get their hands on it to control it; there is no central server that a hostile power could monopolize. Instead, the transaction database (the blockchain) is distributed across the network in thousands of copies. This is also the case with gold, which served as a model for crypto-currency and was inspired by its characteristics (means of payment, a quantity that increases little from year to year as it is rare). While gold is considered a centralized asset due to its link to currencies and banks, it has now been linked to the relatively new cryptocurrency industry.
Fearful of the massive debt and currency debasement in recent years, millions of investors have flocked to crypto and gold as places to store their wealth. A fundamental distrust of human power and claims to authority, backed by historical lessons, is at the core of this shift. History presents a series of cycles of the same stories told under different names and in other places. Both see their preferred asset, whether it’s cryptocurrency or gold, as a way to safeguard their wealth and purchasing power. It’s easy to understand why. With a 2% inflation rate, it takes less than 25 years for a currency to lose 50% of its purchasing power. As a result, the rise of cryptocurrency and the continued popularity of gold are understandable and logical. In fact, the conflict between the two parties was illogical.
Gold and cryptocurrency exist outside of the traditional financial and, more importantly, political systems. Both have decentralized pricing, are finite (at least most cryptos are), and can be used as a store of value and a future medium of exchange (as crypto volatility declines and as both crypto and electronic, physical gold become more common). As a result, the conversation is rapidly shifting. Rather than pitting themselves against each other, perceptive investors are taking a more nuanced approach. The debate is no longer about gold vs. cryptocurrency. Both contribute to hedging the risk of inflation, with a long history of certainty.
How GoldPesa is changing things with their gold-backed token
In a commitment to give people access to crypto tokens and gold, GoldPesa has created a digital token that transforms gold into an income-generating asset class. The team at GoldPesa is dedicated to providing access to a cryptocurrency that combines the simple ideology of intrinsic value with an asset that has passed the test of time and an intelligent quantitative trading strategy that was only previously available to the top 1%. To this end, GoldPesa’s objective is to create a gold-backed token that trades at a premium and has the chance to build wealth the way Bitcoin has.
Although GPX is backed by gold, it is not a stable coin. GPX has the characteristics of a tokenized gold-backed structured product because it combines physical gold, quantitative science, and blockchain technology. Each GPX token is backed by one gram of pure gold held in a secure vault. Its tokenomics, on the other hand, are truly unique. When buying a newly minted GPX token from GoldPesa, the price is the spot gold price plus 1%. The PAWN, a proprietary intelligent trading strategy developed by GoldPesa, manages half of the 1% fee. The profits generated by the PAWN are used to purchase and burn the GPX token on the market. As a result, GoldPesa creates demand while simultaneously reducing supply, driving the price of GPX higher for token holders.
For more information about GoldPesa, click here.
I’m a highly experienced and well-respected author in the field of cryptocurrency. I have been involved in the industry for over 5 years and have written extensively on the topic, both for academic and general audiences. I’m highly sought-after as a speaker and consultant on cryptocurrency, due to my in-depth knowledge and understanding of the industry. I’m also a regular contributor to leading industry publications.
Emie Kohler