Gold rush demonstrates ongoing trust of safe haven assets, shows ‘digital gold’ has a way to go
In light of the price of gold hitting an eight-month high, Ian Lowe, CEO of crypto-wealth exchange Dacxi, offers his thoughts on the situation, what this says about the current level of trust in cryptocurrencies, also offering an alternative solution for gaining quick exposure to precious metals.
“The recent rush for gold amid geopolitical tensions between Russia and Ukraine demonstrates that cryptocurrencies, dubbed ‘digital gold’ by many, still have some way to go if they want to be considered a ‘safe haven’ asset.
“The price of gold hitting an eight-month high this week is proof of the continued deep trust in the asset, despite shifting attitudes towards crypto investment. Dacxi recently conducted research with YouGov that found 56% of investors in Australia are investing in cryptocurrencies with long-term goals in mind, showing a move away from fly-by-night investors in it for a quick buck.
“But ultimately when uncertainty impacts markets, particularly those the size of the US, precious metals again become the go-to for investors hedging against the unknown. We saw this happen during the first year of the pandemic in 2020 as well, when gold prices spiked at over $US2,000 an ounce.
“So if we accept that these behaviours are unlikely to change anytime soon, it’s then worth addressing the fact that actually investing in physical gold is really difficult. It is bulky and difficult to store, and such challenges mean people often turn to alternatives like investing in gold mining stocks via ETFs.
“We believe the future of investing in precious metals is through tokenisation. Using blockchain technology, Dacxi now offers tokenised gold, silver and platinum, allowing for quick exposure to gold, either on its own or as part of a ‘Precious Metals Bundle’. What’s more, these bundles are available alongside crypto bundles on the Dacxi platform, allowing investors to get balanced exposure cryptos and ‘safe haven’ assets on the same platform.”