What is a gold-backed cryptocurrency?

Due to the unpredictability of the crypto market, many investors prefer to invest in a cryptocurrency that is tied to the value of real assets.

A gold-backed cryptocurrency is a stablecoin that provides each token with physical gold. In simple words, the price of the token is equal to the current price of gold, thereby giving less price volatility compared to BTC.

Why should you make a choice in favor of this coin?

— Market volatility. Investing in such tokens, traders provide themselves with a more stable form of investment.

— Conversion to gold. If you invest in a gold-backed cryptocurrency, some of the coins can be converted into real gold.

— Such cryptocurrency makes it possible to transfer a unit of gold to another person.

— Cryptocurrency backed by gold has a good market capitalization.

What should you pay attention to when investing?

The minimum price and the repurchase amount.

Before buying a gold-backed cryptocurrency, it is necessary to check the minimum amount of investment, as well as the minimum amount of the repurchase.

Issuer’s transparency

It is a very important point that says that a trader should check and make sure that the issuer is transparent. You have every right to request all the necessary information, and if the token issuer does not provide it, it is worth thinking about.

Liquidity and order book

When investing, pay attention to the liquidity and the order book. You can trade such cryptocurrency on both DEX and CEX.

Conclusion

Choosing a cryptocurrency backed by gold, you can avoid sharp price leaps, thereby reinsuring yourself. When you invest in such tokens, there is a chance that in the future they will be provided with other metals.