June 15, 2021

Inflation increases interest in gold tokens

The Bitcoin rally in 2020 was provided by institutional investors expecting a devaluation of the dollar. Cryptocurrency still has a yield of 300% per year, however, the latest correction has shifted the interests of some investors in favor of tokens pegged to gold.

Despite the optimistic attitude of the Fed chairman to the dynamics of prices, inflation continues to grow stronger than forecasted, reaching 5% in May.
Inflation increases interest in gold tokens

Inflation in the USA,% (YoY)

Prices go up for everything:food products, building materials, real estate. At the same time, there is a shortage of labor in certain industries, which is why wages are growing - and this leads to inflation. Workers earn more and spend more on goods and services.
Inflation increases interest in gold tokens

Dynamics of wages in the USA,% (yoy)

A number of investors are intimidated by the volatility of Bitcoin, andthey prefer tokenized gold. Gold tokens are issued in the erc-20 standard, which gives them cryptographic protection and a high degree of liquidity. Until recently, the token issued by Tether was in the lead, but institutional interest brought Pax Gold to the top spot.
Inflation increases interest in gold tokens

Image Source: StormGain Cryptocurrency Exchange

Paxos Licensed by NYDFS(New York State Department of Financial Services), released the Pax Gold token in September 2019, now its capitalization exceeds $ 260 million.Each token purchased is backed by physical gold and is kept separate from the company's assets.
Inflation increases interest in gold tokens

Image source: coindesk.com

Trading in gold tokens has more liquidity and lower fees compared to unallocated metal accounts (OMC), which are not protected by the Deposit Insurance Agency (DIA).

Investors are looking for ways to protect against inflation, oneof which gold is traditionally. The rise in inflation will lead to a new rally in the precious metals market, and the growth in the capitalization of gold tokens by 3000% in a year and a half confirms the interest in this asset class.

Analytical group StormGain