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The Ultimate Guide to Gold Backed Cryptocurrency

The Ultimate Guide to Gold Backed Cryptocurrency

November 2, 2022

Are you looking for an alternative way to invest in gold? If so, you may want to consider investing in a gold-backed cryptocurrency. Gold-backed cryptocurrencies are fast becoming a popular asset class, as they offer many of the same benefits that traditional gold investments provide, but with the bonus of being digital.

Also, if you are interested in the space but have been put off by the volatile nature of most digital currencies, then a gold-backed digital currency may be the best option for you. 

Price swings have been a common feature in the cryptocurrency market, resulting in investors losing their money. Gold standard crypto offers a more stable option for investors. 

Gold-backed cryptos are more stable than traditional cryptocurrencies, as their value is pegged to the price of gold. This means that you can enjoy the potential upside of investing in a digital currency, without having to worry about a major downside, volatility.

If you are an investor who has heard about the crypto gold rush, but you don’t know where to start, then this guide is for you. We will cover everything you need to know about gold backed cryptocurrencies, including how they work, the benefits of investing in them, and where to find the best opportunities. All of this will help you make an informed investment decision.

What is Meant by a Gold-Backed Cryptocurrency?

A gold backed cryptocurrency is a digital currency whose value is backed by gold. The gold backing provides a more stable price for the cryptocurrency and reduces the volatility associated with other cryptocurrencies. Gold-backed cryptocurrencies can be used to purchase goods and services just like other cryptocurrencies.

While the value of gold-backed cryptos can never fall below the value of the gold it is backed by, it can rise above the gold price. This is because the gold backing gives investors confidence in the cryptocurrency and demand for the cryptocurrency can exceed the available gold.

How Does a Gold Backed Digital Currency Work?

A gold-backed cryptocurrency is a digital or virtual currency that is backed by gold. This means that it has a physical value. This makes it different from most other coins whose value is based on popularity or market speculation. The value of a gold-backed cryptocurrency rises and falls with the gold price. When gold prices go up, so does the value of cryptocurrency. When gold prices fall, the value of the cryptocurrency also falls.

Gold-backed cryptocurrency coins are issued with values that correspond to the weight of the gold they are backed with. For example, one coin is equivalent to one gram of gold. When you purchase a coin, you are purchasing actual gold that is stored in a secure vault by a third party. This can be used to trade with other coin holders.

Despite the gold backing, these coins do have some risks. Gold prices can sometimes fluctuate, and this can affect the value of the coin. In addition, it can sometimes be difficult to determine if the gold is actually being stored as promised. There have also been cases of fraud where the gold does not exist or is not of the quality that was promised. If you plan to invest in gold-backed crypto, you need to be certain that it is kept in a secure facility.

What Are The Benefits of Gold-Backed Cryptocurrencies?

There are several benefits of investing in gold-backed cryptocurrencies.

Stability And Security

The main benefit of gold backed cryptocurrencies is that they are more stable than other cryptocurrencies. This means that there is less risk of losing money due to price swings. This is because the gold price does not fluctuate as much as the prices of other assets such as stocks and commodities. Gold has been used as a store of value for centuries, and this makes it a more stable investment than other assets like Bitcoin which is not backed by anything.


Credibility is another benefit of gold backed cryptocurrencies. This is because they are backed by a physical asset. This gives them more credibility than other types of cryptocurrencies. Risk-averse cryptocurrency investors may feel more comfortable investing in gold backed cryptocurrencies because they are less volatile.


Gold backed cryptocurrencies can be used to purchase goods and services. This makes them more liquid than other investments such as gold bars or coins. They can also be used to make cheap and fast international transfers. While international bank transfers can take days, gold-backed cryptocurrency transfers can be completed in minutes. This cross-border transfer takes place at very low or zero charges.


Gold backed cryptos are transparent because they are backed by gold. This means that you can easily check the gold reserve to see if it matches the number of coins in circulation. This is a big plus for investors who want to know that their investment is safe. 


Gold backed cryptocurrencies also have the added benefit of being more portable and easier to store than physical gold. Gold backed cryptos are stored in digital wallets, which can be accessed from anywhere in the world. This makes them a convenient option for investors who want to diversify their portfolio with a gold investment but don’t want the hassle of storing and safeguarding physical gold.

How to Invest in Gold Backed Cryptocurrencies?

The best way to invest in gold backed cryptocurrencies is to buy them when the gold price is low and hold them until the Gold price rises. You can then sell them for a profit. This strategy will work if you invest in a well-established gold backed cryptocurrency such as Golteum.

You can also invest in new gold-backed cryptocurrencies when they are first launched. This is a riskier strategy as you don’t know if the coin will be successful. However, if you pick a winner, you could make a lot of money.

Examples of Gold Backed Cryptocurrencies

In 1996, E-gold was the first gold backed cryptocurrency. Each E-gold coin was backed by a certain amount of gold. Users could purchase E-gold and use it to purchase goods and services online. E-gold was very popular, but it was shut down in 2009 after it was accused of being used to launder money.

With the emergence of blockchain technology, new gold backed cryptocurrencies have been launched. Some well-known example of gold backed cryptocurrencies are:

Perth Mint Gold Token (PMGT)

PMGT is one of the most popular gold backed cryptocurrencies. PMGT is an Ethereum-based token that is backed by gold held by the Perth Mint in Western Australia. Each PMGT token is backed by one troy ounce of gold. The Australian government guarantees the weight and quality of the gold on PMGT.

GoldCoin (GLC)

GoldCoin is another gold backed cryptocurrency. GoldCoin is also backed by physical gold at 1000 GoldCoin per ounce of gold. GLC can be converted into gold or fiat, and it can also be used to purchase goods and services. GoldCoin can be purchased from some ATMs.

Tether Gold (XAUT)

Tether is the biggest USD-backed crypto. It has launched a gold-backed stablecoin known as XAUT. XAUT is backed by gold bars held in vaults in Zurich, Switzerland. Each XAUT gold token is backed by one troy ounce of gold. Gold bars are assigned serial numbers with which investors can check the gold reserve. Investors can withdraw their coins as gold or cash. XAUT tokens are available on blockchains like Ethereum and TRON.

DigixGlobal (DGX)

DigixGlobal is a gold backed cryptocurrency that is based on the Ethereum blockchain. It is ideal for investors who can't afford to purchase a full-sized bar of gold. People can invest in fractional tokens that can be transferred and redeemed with ease. Gold DGX tokens are backed by gold bars held in vaults in Canada and Singapore. Each DGX token is backed by one gram of gold.

Paxos Gold (PAXG)

Paxos is a gold backed cryptocurrency that is issued by Paxos, the company behind itBit cryptocurrency exchange in Singapore. Each PAXG token is backed by one troy ounce of gold. PAXG is regulated through a charter with the New York State Department of Financial Services (NYDFS). PAXG is available on most well known exchanges.

How to Invest in Gold Backed Cryptocurrencies

If you want to invest in gold-backed cryptocurrencies, you should do your own research before investing. You should only invest in a gold backed cryptocurrency if you are comfortable with the risks. Gold backed cryptocurrencies are a new asset class, and they can be subject to a bit of price volatility. You may also diversify your investment portfolio by investing in other assets such as stocks, bonds, and commodities.

When buying gold backed cryptocurrencies, you should always buy from a reputable exchange. You should also check the gold reserve of the issuer to make sure that each coin is backed by gold. Finally, you should hold your gold-backed cryptocurrencies in a secure wallet. It is also important to find a trusted cryptocurrency exchange that allows you to buy gold backed cryptocurrencies. Some popular gold-backed cryptocurrency exchanges are Binance, Huobi, Golteum, Coinbase, and Gemini.


Binance is a leading cryptocurrency exchange that offers a wide range of gold-backed cryptocurrencies. Binance has built a reputation for being reliable and user-friendly. The platform lets you fund your account through your bank and also allows you to convert almost all assets into gold stablecoin crypto.


Huobi is another popular gold-backed cryptocurrency exchange. Huobi also offers a wide range of gold-backed cryptocurrencies.


Coinbase is a popular cryptocurrency exchange that allows you to buy gold backed cryptocurrencies with fiat currencies such as USD, EUR, and GBP. It is based in San Francisco and has higher trading fees than most other platforms.


Gemini is a cryptocurrency exchange that is regulated by the New York State Department of Financial Services. Gemini was founded by the Winklevoss brothers and the exchange offers insurance coverage for assets stored on the platform.

The Future of Gold Backed Cryptocurrencies

Gold has always been a popular way to protect assets. Gold is generally a more stable investment than other assets such as stocks and commodities. Gold-backed cryptocurrencies are also more liquid than gold, which makes them more convenient to trade. As a result of all of these factors, the future of gold backed cryptocurrencies looks bright.

Typical Cryptocurrency Versus Gold Backed Cryptocurrency

Bitcoin is one of the most popular cryptocurrencies. One of the major arguments against it is that it is not backed by anything of physical value. Gold backed cryptocurrencies are different. They are backed by gold, which is a physical asset with a long history of being used as a store of value.

Bitcoin is also subject to high price volatility. Gold backed cryptocurrencies are more stable because they are backed by gold. Gold is not as volatile as other assets such as stocks and commodities. The price of gold-backed cryptos does not skyrocket and crash like the price of traditional cryptocurrencies like Bitcoin. Gold-backed cryptos are a more stable investment than Bitcoin.

The Bottom Line

A gold backed cryptocurrency is a digital asset whose value is determined by the equivalent gold price. Gold backed cryptocurrencies are more stable than traditional cryptocurrencies like Bitcoin, and they have the potential to become mainstream investments in the near future. To protect your investment, always buy gold backed cryptocurrencies from a reputable exchange, and you should hold them in a secure wallet. 

Are You Ready to Begin Your Gold Backed Cryptocurrency Investment Journey? 

If you have any questions or would like more information about gold backed cryptocurrencies, our website has everything you need to get started. Even if you’re a beginner trader, we have helpful resources that will help you hit the ground running.

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