Digital Gold — As a safe haven

5 min readNov 2, 2020

The desire for gold is not end in itself. The purpose of owning gold is freedom and profit. Ralph Waldo Emerson

Currently, there is a large number of scientific and independent studies proving the nature of gold as a security asset and showing the importance of this metal in investment and pension portfolios. This part of the distribution of investment funds is intended both to increase profitability and to combat the general level of volatility.

The usefulness of gold for an efficiently diversified portfolio has been demonstrated in numerous academic papers, which include independent research by asset allocation companies Mercer Consulting and Ibbotson Associates, New Frontier Advisors, and Chatham House, a leading global think tank.

For a millennium, the yellow noble metal has protected people’s funds from currency depreciation. The story itself shows how gold has served as a shield in the stock market funds and the period of the real estate market, as well as asset forfeiture.

What is a safe haven asset?

These are investments whose value persists or increases in times of instability in the markets. Investors invest in security assets to limit potential losses in the event of market downturns. However, the concept of “safe haven” changes with market conditions, and what is considered a “safe” investment in one downtrend market can be a disastrous investment in another.

Academic research.

Since the onset of the financial crisis, research on gold has increased significantly. Academics are beginning to agree that the noble metal fully fulfills the role of a safe haven asset. In recent years, experts have carefully studied the qualities of the yellow precious metal as a hedging tool and security asset. According to Sherman (1982), setting aside 5% of the total portfolio in gold results in lower risk and higher returns. A study by Hillier, Draper, and Faff (2006) suggests allocating a small percentage to a variety of precious metals, of which gold is the most effective diversifier. In a more recent study, Baur and McDermott (2010) confirmed that the yellow metal is an excellent way to hedge for stock investors and a safe haven for bond investors internationally.

The role and place of gold in a portfolio is perhaps the most explored area at this point. In their study, Bruno and Cincarini suggest that non-US investors allocate 10% for their investments in gold. Scherer recommends investing 5–10% in this asset for sovereign wealth funds. Family investment firms and high net worth individuals are advised by Clement and Longchamp (2010) to allocate 5 to 10%.

Lucy, Poti (2006) recommend that investors interested in market fall protection allocate between 6% and 25% of their funds to invest in gold, depending on the time frame and other assets included. Baru and Lucy (2010) provided the first statistical test to demonstrate when a precious metal acts as a safe haven and when as a hedging instrument.

In November 2011, a research paper by Dr. Konstantin Gurdjieff and Dr. Brian Lucy was presented at a conference hosted by the Bank for International Settlements (BIS), the ECB and the World Bank.

Their analysis also clearly showed the importance of gold for a diversified portfolio, as the yellow metal is both a hedging method and a security asset.

Digital Gold

Digital gold is a digitized form of gold, and it is designed in such a way that the commission is similar to real gold, but in digitized form. Gold stablecoins do not reveal the incredible value oddballs with which unique virtual currencies are incited. Gold stablecoins are convenient and durable, with advanced wallets, short trades, low costs and wealth.

The Digital Gold coin offers an even more comprehensive solution. This token not only provides all the advantages of stablecoins, but also brings you additional profit as it is constantly increasing in value compared to all stablecoins pegged to fiat currency. This is because the GOLD token is pegged to gold, and the price of gold in relation to fiat currencies is constantly increasing.

Thus, the easiest and safest way to invest in gold is the DIGITAL GOLD

PLATFORM through the GOLDEN TOKEN, which is based on the Ethereum network and is compatible with the most popular cryptocurrency wallets that support the standard Ethereum ERC20 tokens and are also supported. due to the stable characteristics of physical gold. 1 gold coin is equivalent to 1 gram of 99.9% pure gold.

Digital gold token The digital gold token is the proprietary token of the Digital Gold platform. It is an ERC-20 token, which means it is built on the Ethereum blockchain. The gold token can be traded on various exchanges and exchanged on the Digital Gold platform. The gold token is backed by physical gold. One gold token is backed by the equivalent of 1 gram of 99.99% gold. At the time of this writing, the price of 1 gram of gold is equivalent to $ 55.67.

Conclusion

The gold token is a stablecoin because it is 100% backed by physical gold. This means that you can own a gold token without fear of losing your money. Investing in a gold token will give you access to all the benefits of physical gold, as well as relieve you of that risk associated with physical gold.

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