We knew the cryptosphere was always on the lookout for explosive increases in Bitcoin prices, but lovers of precious metals are also all eyes on the price of the yellow metal. While the ounce of gold hit an all-time high in August of around $ 2,000, most seasoned commentators are betting it can climb further! While we speak of digital gold to qualify Bitcoin, what about the oldest safe haven currency? Follow us on the fabulous 2020 Gold Rush adventure back to the future, and stay with us until the end to find out how to combine blockchain and gold, we won’t tell you more.
Warning : This article is brought to you by the company Vera One. Crypto investments are risky by nature, do your own research and invest only within the limits of your financial capacity. This article does not constitute an investment invitation.
In the beginning was the precious metal
Let us first recall the primary role of the yellow metal: even before the Bretton Woods agreements in 1944, and long before Satoshi Nakamoto, gold was one of the currency used for the purchase of goods and services. In effect, it was the asset on which the exchange rate was based. It is therefore easy to understand that gold reassures ordinary people since it is assimilated to a tangible asset, associated with wealth in the collective imagination and because it embodies a feeling of stability in the face of the madness of certain stock prices.
However, opinions have often differed about the value of investing in gold, for example John Meynard Keynes called him barbarian relic, and Warren Buffet, famous for his rebounding investments, will criticize for many years the interest in investing in gold, even if we will see that he ended up changing his mind, crisis obliges …
However, in times of crisis, many investors have a habit of rushing for gold, believing that all other investments seem riskier, thus pushing up its price. It must also be said that in addition to not being controlled by a state, gold ultimately does not belong to anyone, so it is a timeless asset, without borders, Doesn’t that remind you of a famous cryptocurrency? In short, a real guarantee of fungibility, everyone will agree to buy back your gold, because it is politically neutral.
“Gold is money, everything else is credit. “
From a monetary instrument and symbol of wealth until his marriage to crypto thanks to the project VRO, the 100% gold-based stablecoin-type token, how is the gold rush still possible in 2020?
Gold represents un global market of around 4,500 tonnes mainly from gold mining production and recycling. Yes, gold is recyclable! The demand for gold is divided between jewelry store, industry and the finance (investment and requests from central banks). Finally, gold production probably reached its peak in 2019 and we expect a 20 to 25% drop in production by 2027 which will undoubtedly create an increase in prices such as to encourage holders to put them back on the market.
Did you know ?
At the time, Paris was a place of gold, it was the golden age, the Palais Brongniart still hosted mining companies, mostly from South Africa, before emigrating to London and Toronto. France also stood out by being the last country to officially list gold coins and bars. Indeed, it is now a private actor CpoR Devices which provides a daily benchmark listing on 24 currencies.
So, like P Diddy, are you ready to put some gold in your life?
2020: year of the gold rush?
We have had more fun years than 2020, but at least it will have had the advantage of raising the gold court to historic levels!
Let’s take a closer look, the last 5 years have allowed us to draw 5 cycles in the fluctuation of the price of gold that we present to you here:
Note the fine performance of + 77% increase in the price of gold over the past 5 years, reaching $ 2,067 per ounce in August 2020. Imagine that even Warren Buffet, one of the fiercest opponents of gold, invested in this context, pushing up a gold company in which he invested the modest sum of … half a billion dollars in securities. If we look at the news of recent months, between the Covid19 crisis and the accommodating policies taken by the Fed and the ECB to lift the economies, we can reasonably bet on the continuation of this rise in the yellow metal.
In the catalog of precious metals, the most traditional investors will of course turn to ingots currently worth € 52,000, see the pocket version I named ingots, valued at € 560 for 10 grams. For collectors of old coins, the traditional Napoleon 30 gold francs negotiated around € 323. Gold, at the mercy of real rates falling since 2020, should continue to enjoy a solid rise.
So, if you want to invest in gold the traditional way, here are some tips:
- Buy physical gold from shops and specialized sites as aucoffre.Com for example, which revolutionized the buying of physical gold on the internet 10 years ago. With such loot in physics, the question of storing and securing your precious asset arises: sealed safe, bank, investment sites … but as a “good father” you will no doubt find the right solution. JP Morgan, a famous investment bank has already set up a blockchain to track its precious, smart;
- Hold paper gold with banks or brokers : here the most used media are often ETCs (Exchange Traded Commodities) or certificates that you may hold on investments such as unit-linked life insurance or a securities account.
- Investing gold in the stock market through shares in companies in the sector : This is the case of our good Warren Buffet who shows us the way of investing in stocks of publicly traded mining companies.
What else? it doesn’t stop there, we’re unveiling now another way to invest, and you will understand that this is a project that we have already told you about in Thecointribune.
A few months ago, we already listed you the various stablecoin projects backed by physical gold sometimes exotic, and often aborted, especially for complex regulatory reasons. On the other hand, a French start-up has succeeded in the impossible: create a crypto company and launch a gold backed stablecoin, hang your belts !
Tokenizing gold: how does VeraOne blow a wind of revolution in the very closed world of the yellow metal?
Gone are the elitist and almost sectarian vision of gold holders, Veraone, project that we had the opportunity to present and that we like to follow on Thecointribune has been able to reconcile the cryptosphere and the yellow metal, so popular with investors since the dawn of time.
With the firm conviction that gold must now be within everyone’s reach, and that not everyone has a Swiss banker in their contacts, the young but already strong company presents a tempting value offer. True digital token backed by physical gold in a safe, this is the crazy project that the companies decided to set up in 2019 Aucoffre.com; Veracash, VeraValor and Lingold. Against a backdrop of economic crisis and crisis of confidence, the project could not have come at a better time!
VeraOne is therefore a stablecoin backed by the gold held and well guarded in Switzerland.
The principle is simple: you buy a VRO, or 1 gram of physical gold, that you deposit in the form of token in a wallet using technology Ethereum, and physical gold is stored and managed under your surname by the company. So here you are, the happy owner of a gram of gold, tangible, verifiable and secure, for which your VRO token constitutes the deed of ownership: little revolution, no? We find well here the characteristics of the blockchain: transferable tokens without any intermediary, the property of traceable gold and a safe and stable solution since it is backed by physical gold.
The society Veracash, it even offers you a payment card to pay for your purchases and not just any old way … with your gold.
And if you are still hesitating, despite the current context, take a look at this article who introduces you the 3 good reasons to invest in gold with VeraOne!
To go further … the major trends of 2020 for investment in precious metals
Beyond gold, investments in precious metals are not about to wither, whether through traditional methods or through wallets.
Indeed, the money, generally correlated with gold seems to increase too, but not as much as the palladium which signs him an increase of more than 170% in recent years to reach 2,500 dollars an ounce. But we will also have to keep an eye on the rest of the alternative investments such as art, wine or wood, which can have some nice surprises in store for us! We will come back to these different subjects regularly on your favorite crypto media.
If you want to learn more about VRO or be a true precious metals investment mogul, Find all of our articles in the alternative investment forum!
Karen is passionate about new technologies in general, and blockchain in particular! Finding out about trendy news, the latest market developments and the treasures of the ecosystem, she is happy to help you discover this universe in all its colors.