In A Bear Bloodbath, Head For The Hedge

Retail crypto investors are getting liquidated. Some of the industry’s biggest names are in freefall, if not completely wrecked, and the overall market sentiment is so negative that many investors may leave to never return again.

In traditional markets, macroeconomic pressures continue to mount up as regulators fight to stave off a stock meltdown in the face of a full-blown recession.

In short, things are very bad across the board.

In times like these, it’s important to have some context and perspective. History always repeats itself. This is not the first bear market and it will not be the last. The good times will return and now is the moment to ensure that your investments are both lined up to weather the storm and prepared to reap the rewards once the sun shines again.

It’s hard to describe such a negative period for so many as one of opportunity, but that is exactly what it is.

Go for Gold

You can’t talk about the history and the waxing and waning markets without referring to the asset class that has stood the test of time like no other.

Gold has been considered valuable for around the last 4,000 years and it is still highly significant to this day. In fact, it is particularly significant in times like these when the markets head south and a global recession looms.

And while the crypto market is now seeing many head for the exit, there are a number of interesting projects that have seen the value of uniting the historical solidity of gold with the innovation of crypto.

The wider markets may have you on the run, but these gold-backed crypto tokens could well be the perfect solution to seeing out the bear market intact and coming out the other end ready to reap the great rewards that the next bull market is sure to bring.

Paxos Gold

The market leader in gold-backed cryptos, Paxos (PAXG) holders own not only the token, but also the underlying physical gold. This gold is held securely by the Paxos Trust Company in vaults.

In recognizing one of the biggest entry barriers to the widespread adoption of gold-backed crypto, Paxos recently lowered its minimum price amount and took away custody fees. 

With a total value of close to $600 million, Paxos is currently ranked as the 63rd largest token by market cap by CoinMarketCap.

AABB Gold Token (AABBG)

When looking to enter any market, it’s often wise to first seek out those that have the potential for the greatest upside. Gold-backed tokens are pegged to the price of gold, but wider adoption by the crypto community can still drive up the base price of the token.

The company behind AABBG, Asia Broadband, Inc. AABB, is a well-established entity that is heavily invested in the production of gold. Asia Broadband launched the AABB Gold Token, using $30 million of its gold bullion as collateral with the goal of becoming a worldwide standard of exchange that is secured and trusted thanks to its unique mine-to-token vertical integration.

Not only does AABBG feature this unique mine-to-token feature, but its entry point is a reasonable one that enables retail investors to play their own part in this exciting sector without parting with the huge outlay that comes with tokens such as XAUt.

A further point of differentiation from other gold-backed cryptos is that AABBG is part of the wider AABB Ecosystem, which includes its own proprietary exchange and wallet. Both of which will help to drive up adoption in the token once this crypto winter starts to see the sun again.

Tether Gold

A name that will be familiar to most people with even a passing knowledge in crypto, Tether Gold (XAUt) is brought to us by the same people who run the world’s largest US-dollar-backed stable coin, Tether (USDT).

A full XAUt token represents one fine troy ounce of gold on a London Good Delivery bar. This XAUt token can be transferred to any on-chain address from the purchasers' Tether wallet where it is issued after purchase. Specific gold bars are associated with each on-chain address where Tether Gold is held.

While clearly a solid project from serious people, a big issue with XAUt is its entry point. Investors must purchase 50 XAUt or 50 troy ounces of gold to get onboard. This would equate to just shy of $90,000 at the time of writing. Holders can split the token and exchange it for gold or profit from its sale, but they must also hold a full bullion in order to redeem any amount.

Meld Gold

Meld Gold is a new gold-backed crypto that is looking to do things a little differently from the rest of the crowd. Whereas, most gold-backed tokens have a central issuer that holds the physical gold in its custody, Australian startup Meld Gold takes a different approach.

Each MCAU token represents a single gram of gold held by various companies throughout the supply chain, including Melbourne Mint, one of Australia’s leading bullion retailers, for ultimate decentralization.

Meld verifies all entities before they are accepted to join the network and they believe that without a single entity owning all the gold issued, there will be no central point of failure.

The Meld Gold token does not have a fixed supply, but instead the market supply and demand for traditional and digital gold determines its minting and burning.

While still mainly at the experimental stage, Meld Gold could be one option to keep an eye on in the future.

Image sourced from Unsplash

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