With the recent pullback of the crypto market and huge corrections in the value of the top-performing cryptocurrencies, many investors are now setting their sights on digital versions of traditional commodities like gold and silver.
These investors are opting to buy PAX Gold (PAXG) as an alternative to more volatile cryptocurrencies, while avoiding the inflation of the US dollar. So, what is driving the popularity of this gold-backed digital asset?
PAX Gold is the first gold-backed and fully regulated digital asset. It represents physical gold bars, with its value tied directly to the real-time market value of the physical gold it represents.
When it comes to gold, investors should consider it an important part of a diversified investment portfolio. It’s an effective way to offset losses from more volatile assets during a downturn in the market, since its price often rises in response to events that cause the value of paper investments, like stocks and bonds, to decline.
Even though the price of gold can be volatile in the short term, historically it has always maintained its value over the long term. For this reason, many investors use it as a hedge against inflation, making it an investment worth considering.
With that in mind, what are some of the main reasons investors are buying PAX Gold, and what are the benefits of owning it?
PAX Gold gives you the benefits of physically owning gold bars, but with the speed and liquidity of a digital asset, fractional ownership, and without the security risks of, say, physically storing gold bars in your home safe or paying for storage at a vault.
Speed and liquidity of a digital asset
Since owning PAX Gold means you don’t actually have to lug gold bars around, it’s a lot easier and faster to buy and sell them on the Ethereum blockchain at any time, as you don’t have to go through the process of having them certified and validated by the relevant authorities before they can be traded or exchanged for their market-related value.
It’s not only the security that makes PAX Gold an easier asset to get involved in – its other benefit is that it’s highly divisible and mobile, so anyone can have fractional ownership of physical bars by buying small amounts of gold at very low prices, which simply wasn’t an option before PAXG.
No custody or insurance fees
PAXG is for anyone looking to invest directly in gold without the custody and insurance burdens of physically looking after it – making it a modern and effortless way to own physical gold without the expense and hassle.
Safer storage than your home safe
Why does owning PAX Gold digital tokens pose less risk than owning physical gold bars? Simply put, the answer is security. Every London Good Delivery gold bar that backs Pax Gold tokens is stored in Brink’s gold vaults – the official storage company of the London Bullion Market Association. You can rest assured that Brink’s gold vaults are a much safer place to store your bars of gold than the home safe you bought on sale a few years ago, or your local bank’s vault.
PAX Gold has a market capitalisation of US$241.5-million, with 127 460 tokens in circulation at the time of writing. This milestone makes PAX Gold the biggest non-dollar asset backed token.
The gold market exploded in 2020, but it’s digital gold that has seen a surge like no other product.
In fact, there has been a 2.5x increase in the total supply of PAX Gold, and 10% growth over the past year. On-chain activity, which indicates how much the PAX Gold in circulation is traded, has increased a remarkable 500%.
The bottom line? Gold is not going away any time soon. The world has trusted and relied on it as a store of value for centuries. PAX Gold is simply the easiest, fastest and cheapest way to get the highest-quality physical gold.
The $200-million mark is a symbolic one, but ultimately it’s just one small step in the journey of transitioning to a decentralised financial system.
Where can I invest in PAX Gold?
South African fintech Revix introduced PAX Gold (PAXG) in early 2020, allowing investors to purchase and own gold tokens which represent legal fractional ownership of physical gold bars held in London Brink’s vaults without having to store, manage or secure the precious metal.
According to Revix founder and CEO Sean Sanders, PAXG tokens “remove the hassle from investing in gold, giving it all the security, effortless storage and transferability benefits of bitcoin”.
“In our continued effort to give our customers exposure to cutting-edge financial products, we felt that PAXG was a no-brainer in that it provides customers with a secure, simple way to invest in gold without the drawbacks seen in traditional gold investment funds,” he said.
Whether bitcoin beats gold as a safe-haven asset is a debate that will likely rage for years to come. Both have something to offer investors. The good news is that both can safely be purchased through Revix on a single platform. The benefit of both bitcoin and PAXG is that they are infinitely divisible – meaning you can get exposure to both bitcoin and gold for as little as R500.
What else does Revix offer?
Revix also offers three crypto Bundles that are like the S&P 500 for crypto: Investors gain diversified exposure to the top-performing crypto assets in just a few clicks.
The Top 10 Bundle provides equally weighted exposure to the top 10 cryptocurrencies making up more than 85% of the crypto market.
The Payment Bundle provides equally weighted exposure to the top five payment-focused cryptocurrencies, including bitcoin, XRP and litecoin. These cryptos aim to make payments cheaper, faster and more global and are aimed at those who believe making payments with cryptos will become as easy as sending an e-mail.
The Smart Contract Bundle provides equally weighted exposure to the top five cryptocurrencies built around smart contracts and includes the likes of ether, EOS and tron. Smart contract cryptocurrencies sit on the blockchain rather like mobile apps rest on Android or iOS. These cryptocurrencies aim to revolutionise how supply chains and trading networks operate through smart contracts. This is Revix’s top-performing Bundle as it has benefited from the explosive growth in the decentralised finance (or DeFi) space in 2020.
This article is intended for informational purposes only. The views expressed are not and should not be construed as investment advice or recommendations. This article is not an offer, nor the solicitation of an offer, to buy or sell any of the assets or securities mentioned herein. You should not invest more than you can afford to lose, and before investing, please take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.
Revix brings simplicity, trust and great customer service to investing. Its easy-to-use online platform allows anyone to securely own the world’s top investments in just a few clicks. Revix guides new clients through the sign-up process to their first deposit and first investment. Once set up, most customers manage their own portfolio but can access support from the Revix team at any time. For more information, please visit www.revix.com.
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