During a bear market, investors look for safe havens to protect their wealth and investments. Gold is one of the most popular safe-haven assets because it has been around for thousands of years, and its value has remained relatively stable over time.
Gold is also considered an inflation hedge, which means that if you own physical gold, your purchasing power will increase as prices rise. This makes gold a great investment during periods of economic uncertainty.
More recently, we’ve seen the rise of gold-backed cryptocurrencies. While some directly tie their value to the price of gold, others use physical gold as reserves. However, both help provides stability to investors.
When there’s a downturn in the stock market, some investors choose to take their money out of stocks and into gold instead. With the current crypto bear market, is it also a good idea to invest in gold-backed cryptos? Let’s find out!
A gold-backed cryptocurrency is a digital currency that is backed by physical gold. This backing comes in two ways; some have a 1:1 ratio with gold like Paxos Gold, while others use gold reserves as a backup like illumishareSRG.
The idea is to provide investors with another safe haven within the crypto space.
Now, you’re wondering what’s so important about investing in gold. Well, first off, let’s talk about why gold is valuable.
Gold has played an immense role in the financial sector for as long as history can remember. During ancient times, gold was the preferred form of payment for trade.
In modern days, gold still plays an integral part of our economy. In fact, the United States operated on a gold standard as an economic system up until 1971.
Gold has different main attributes that make it stand out from other precious metals.
1. Gold is scarce: There’s only a finite amount of gold in the world. It’s not found everywhere or even in every rock. That makes it hard to produce.
2. It is durable: It takes a lot of energy to create gold. So, once created, it lasts forever. It doesn’t decompose or rust away. Instead, it is reused for other things over and over again.
3. Gold is acceptable worldwide: No matter where you go in the world, people accept gold as a form of payment. You don’t need to speak a different language to pay someone back in gold.
4. It is the best hedge against inflation: Because it’s scarce, it tends to hold its value better than other commodities. When inflation rises, gold usually holds its value well.
Now we’ve seen just how much value gold has held through the centuries. However, is it safe to invest in gold-backed crypto to protect yourself during a bear market?
To begin with, gold-backed crypto offers a way to diversify your portfolio. Plus, they’re easier to carry as they’re digital assets.
Overall, if you’re looking to invest in the bear market, then you should consider a gold-backed cryptocurrency.
At illumishare, we believe money should give the people both stability and opportunities. As such, we’ve created a new digital economy that combines the power of stability of gold with two other unrelated assets to create the perfect cryptocurrency. These assets include physical cash reserves and technology.
One unique thing about this combination is that each asset works individually and isn’t directly tied to the price of our SRG token. Plus, they will only kick in to help provide stability to our clients if our price drops to 40% of the all-time high market cap.
Our SRG token also comes with a real-life value that every member will get to enjoy.
Are you looking to be a part of our growing community? Join us from the start and enjoy early adopter benefits.