Gold is best-known for its universal value. Time and again, various nations sought the help of gold when times were tough. For instance, if there is currency devaluation in a particular country, the government would turn to gold for their alternative IOU for the time being.
For many years, people had considered gold as one of the most desired investment assets in their portfolios due to its relatively high intrinsic value. However, since the emergence of cryptocurrencies, gold had been held in the hot seat.
Since then, people had been questioning whether gold is still the best form of investment in the market. For quite some time, metal enthusiasts had stayed loyal to their path, but ever since the price of gold has stagnated, many people started to cling to cryptocurrencies.
The demand for precious metals may have risen, but so did the supply. In that sense, when the supply is up, the value of the asset can potentially go down or stagnate.
Meanwhile, Bitcoin as a cryptocurrency with limited supply can potentially increase in value in the next five years or so.
The year 2017 ended with many people thinking that gold and cryptocurrencies can only become rivals. But now, we see that these two assets can potentially work together to create a better investment opportunity for everyone.
Perth Mint to Utilize Cryptocurrency to Put the Spotlight Back to Gold
Perth Mint, Australia’s biggest refiner, has decided to develop its cryptocurrency that is backed by gold.
This genius plan is directed at giving customers ease in buying gold by integrating blockchain technology into its system.
As you are aware, Bitcoin technology focuses on creating a public ledger for its users. Perth Mint had stated that it intends to use the same technique. However, this time the strategy will focus on gold purchases.
Since the inception of the blockchain technology, people had used Bitcoin as a channel to enhance and broaden the usage of various sectors such as agriculture and land registration.
With that, Perth Mint Chief Executive Richard Hayes is convinced that it can take advantage of Bitcoin and use it to bring back investors’ attention to gold and other precious metals.
Hayes believes that the primary reason more and more people are clinging to Bitcoin, and other cryptocurrencies are that in this time of modern technology, individuals are looking for alternative offerings outside the traditional methods.
However, Hayes saw a flaw in the cryptocurrency system. Despite the new and secure method of transactions, digital coins remain to be a volatile investment.
Meanwhile, by creating a new cryptocurrency that can work hand in hand with gold, people may just find the solution to their worries.
Cryptocurrencies may be producing a lot of money for some people. But many people will still see it as a risky business.
By creating a cryptocurrency that precious metal can back, people won’t see cryptocurrency as an obscure investment. What they will see is the gold that is supporting it. In that sense, cryptocurrency and gold work for each other, instead of against each other.