The Increasing Popularity of Asset-Backed Cryptocurrencies


Are you planning to invest your money in the exciting world of cryptocurrencies? If you are a complete beginner, then you may be wondering how digital currencies can have any intrinsic value if they aren’t back by any tangible assets. In 1971, the United States shied away from the gold standard alongside many other countries, prompting paper cash and coins to become the new standard for the majority of people.

Although Fiat money has been used for decades for purchasing goods and services, blockchain technology is challenging the norm by introducing a number of advantages that digital currencies have over their Fiat counterparts. Cryptocurrencies may be new, but they have proven to be more divisible, skiers, and transferable than paper cash and coins. Today, developers are applying these same advantages to traditional the real-world assets such as gold, diamonds, and properties.

Why Many Investors Choose Stablecoins

Before shelling out any money, it’s worth understanding one of the many types of cryptocurrencies you can invest in. Stablecoins are cryptocurrencies whose values are pegged to another asset. The idea is to keep their value is relatively stable compared to other cryptocurrencies on the market. This is precisely what makes them attractive for investors, especially those using cryptocurrency trading platform such as Bitcoin Code.

You may be well aware of the extreme volatility of the cryptocurrency market. It isn’t uncommon to see certain coins rise or fall in value by 100% in a day. While this presents an exciting opportunity for investors to double their money in very little time, it also comes with a huge risk. In fact, governments across the globe point to the volatility of the market when warning their citizens about investing in digital assets.

With stablecoins, however, all this may come to an end. DGX, for instance, is a token backed by physical gold bullion. 1 DGX is equivalent to 1 gram of LBMA-standard gold. If you own DGX, you have the option of redeeming your gold by mail or picking it up from the custodial vault in Singapore.

Stablecoins Versus Real-World Assets

The question remains: why should you choose stablecoins instead of directly investing your money in gold, real estate, or any other real-world assets?

The primary reason why you would want to purchase digital coins is to benefit from the use of blockchain technology. Immutability of ownership, complete transparency and total audit ability are some of the things you can enjoy putting your money in asset-backed cryptocurrencies instead of actually purchasing gold or real estate. Of course, there is the added benefit of increased liquidity. These digital tokens prove more liquid than gold as they can be easily transferred or traded anytime you wish to do so.

Are They Here to Stay?

This particular category of cryptocurrencies is relatively new, yet they have shown a lot of promise in terms of addressing the many problems associated with real-world assets. By applying the many benefits of using blockchain technology, more people can get started with investing in these investment vehicles while also learning the ropes of the cryptocurrency market. The trend of the tokenization doesn’t seem to be going anywhere anytime soon, and it’s exciting to see how they can revolutionize traditional assets such as gold and real estate.


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