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For ages, gold has been synonymous with money with a historical significance. However, in today’s world, there exists a different system of monies (USD, INR etc) used predominantly within national boundaries. These systems were originally based upon redeemability to fixed amounts of gold via a peg to the US dollar. The whole point of paper money was to represent physical gold in a manner conducive to transacting.
By letting gold be divided, stored and transported in a much easier manner, representative paper money enhanced the economic functionality of gold. But there was a caveat hidden in plain sight. There are limitations to supply of physical gold which do not apply to paper money. This potentially enables a dishonest issuer to print representative notes exceeding the gold supply they hold. This added element of trust – a new form of counterparty risk – means that gold-representative paper is an inherently lesser “store-of-value” than gold itself.
It was mainly for this reason that many countries began to repatriate all their gold from American vaults in 1965. This led to rapid depletion of gold reserves, leading to a unilateral suspension of international convertibility of U.S. dollars to gold (that was established in Bretton Woods Agreement). This move completed the official decoupling of gold from the international monetary system, forcing the world into the current era of unbacked, fiat money.
This is where Tether Gold (XAUt) comes in to fill in the gaps created by our modern monetary policies. In today’s article, we are going to briefly explain the basics of XAUt and why buying XAUt might be a prudent investment.
Tether Gold (XAUt) is a crypto asset backed by physical gold. TG Commodities Limited (Tether Gold), digitizes the value of gold using the new token, XAUt. This token gives XAUt holders the ability to own digitally allocated gold, in small sums, that are highly transferable and with comparably low fees.
If you are someone who wants price stability coupled with inflation beating returns, then XAUt is an attractive option for you. If XAUt was bought for Rs.1000 on 1 January 2022, it would have become approximately Rs. 1068 today with a gain of 6.8%. On the other hand, if BTC would have been Rs. 610 today with a loss of 39%. Therefore, XAUt, as a gold equivalent, has potential to become a strong diversified asset in every crypto portfolio.
Initially, when investors enter crypto, they can start with a crypto allocation of up to 2% of the overall portfolio and slowly increase the share with time. They can be counterbalanced by investments in less volatile, physically backed tokens such as XAUt.
Overall, Tether Gold (XAUt) combines the best of traditional safe-haven assets (gold) and modern investments (crypto) in one go.
Giottus is the only crypto exchange platform to have launched XAUt in India. At the moment, XAUt can be purchased with USDT here. Giottus is planning to do a lot of community-related activities like giveaways, trading competitions etc in the coming days. Follow us on social media profiles to participate in them.
Use promocode TNM51 at www.giottus.com/profile#promo after registration to get Rs.51 worth free Bitcoin.
Disclaimer: This article was authored by Giottus Crypto Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.