- Tether Gold (XAUT-USD) – Backed by one of the world’s largest stablecoin ventures.
- Paxos Gold (PAXG-USD) – Oldest gold-backed cryptocurrency on fledgling market.
- Perth Mint Gold Token (PMGT-USD) – Government-guaranteed gold backing.
Gold-backed cryptos have been gathering momentum as a hot, new store-of-value play since last year. Indeed, crypto presents its investors with some interesting buying opportunities, many of which are tied in price to other assets. Wrapped tokens track other crypto prices. Stablecoins are pegged at the same prices as various fiat currencies. And now, gold-backed cryptos allow one to buy a digitized asset pegged to the price of gold.
Gold investing is a popular avenue for hedging against inflation. Gold-backed cryptos, then, allow one to reap the same benefits of commodity investing, while also having the ease of use of a cryptocurrency. Not to mention, owning the asset in crypto form allows one to earn additional income through DeFi platforms.
While still a new industry, there are several cryptos that have cropped up, seeking to take leadership over an industry that can expect to continue growing in the coming years. And luckily for investors, these assets are backed by reputable organizations, removing much of the worry from buying. Let’s take a look at the best gold-backed cryptos to buy right now.
|Perth Mint Gold Token||PMGT-USD||$1,958.79|
Best Gold-Backed Cryptos to Buy: Tether Gold (XAUT)
If you’re familiar with stablecoin investing, you’ve likely heard of Tether (USDT-USD). The $1 USD-pegged token is one of the largest in the world and handles a significant portion of stablecoin investing and DeFi usage. Well, the same project is also home to one of the biggest gold-backed cryptos to buy, XAUT.
The XAUT token, like USDT, is backed by an underlying reserve of assets. But while USDT is backed by cash, other cryptos, commercial paper and the like, XAUT is supposedly backed 1-to-1 by Tether’s own reserves of physical gold. It backs this claim further by allowing investors to track the exact gold that underlies one’s investment by using their wallet address.
Through this offering, Tether removes several annoyances from gold investing. Importantly, one needn’t worry about moving or storing physical assets when buying XAUT tokens. One can also earn passive income by staking the crypto. Most popularly, XAUT can be staked on the Celsius network or Bitfinex for returns of 1%-5%.
Best Gold-Backed Cryptos to Buy: Paxos Gold (PAXG)
Similarly, Paxos Gold is tied to an existing stablecoin network, the Paxos Dollar (USDP-USD). The Paxos stablecoin might not be as known as USDT, but the Paxos Gold token is perhaps the best known gold-backed crypto. After all, it is the oldest in the asset class, having launched in late 2019.
Paxos Gold has set the standard for gold-backed crypto offerings. Like Tether, the project underlies each token with an ounce of pure gold. These reserves are stored in Brink’s vaults. And like Tether Gold, one can track the serialized gold associated with one’s holding by connecting a wallet address to the network.
Where PAXG edges out XAUT is in its DeFi opportunities. PAXG can be staked across four different networks for returns of 3%-8%. If investors are not comfortable moving assets to any DeFi platform, though, there are still opportunities on Binance (BNB-USD). The largest exchange in the world offers a 1% return on PAXG staking, making for a slow but steady stream of passive income.
Best Gold-Backed Cryptos to Buy: Perth Mint Gold Token (PMGT)
PMGT is one of the best gold-backed cryptos to buy because it is operated in collaboration with Australia’s Perth Mint. This means every token is backed by government-issued gold. The nature of this backing makes PMGT one of the most reliable tokens in the asset class.
Another interesting feature about PGMT is that one can cash in their tokens in favor of physical gold. Using the network’s GoldPass tool, one can swap their PGMT for a gold certificate and have the physical metal delivered. Furthermore, the feature is not limited to Australians.
The only drawback to this unique take on gold-backed cryptos is that exchange options are limited. Being an Australian token, as well as a government-issued one, the only way to buy PGMT is on the Australian Independent Reserve. Luckily, once set up, one can use USD to buy their PGMT, which removes the need to swap for AUD before buying.
On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.