Gold has long held a special place in the financial system as a physical asset that’s more stable and certain than almost any currency. For centuries, nation’s currencies were backed by gold and their gold reserves determined their wealth.
Today, the same concept of a gold backed currency is being applied in the crypto market. In this guide, we’ll explain what gold backed crypto is and why it can be attractive for investors. We’ll also review the 7 best gold backed crypto tokens for 2023.
Gold Backed Crypto Explained
A gold backed crypto is any cryptocurrency for which the value of the digital coins is pegged to a reserve of physical gold. That is, the amount of tokens available or the value of each token is directly related to how much physical gold is sitting in a vault somewhere.
Gold backed crypto is typically a type of stablecoin. The value of the cryptocurrency is tied to the value of gold in reserve, so there are relatively few price swings compared to popular cryptocurrencies like Bitcoin and Ethereum.
The price of these top cryptocurrencies is fully dependent on supply and demand, which can change rapidly based on news and investor sentiment. The price of gold can change, which would change the value of cryptos backed by gold. However, movements in gold’s value happen relatively slowly and are not usually correlated with volatility in the crypto market.
How Does Gold Backed Crypto Work?
Cryptos backed by gold usually offer a mechanism by which investors can exchange crypto tokens for physical gold. This ensures that every token is backed by a specific amount of gold, such as 1 gram of gold per token. While most crypto investors don’t actually want to take possession of a gold bullion, the guarantee of a physical exchange can dramatically increase investors’ confidence in a gold-backed cryptocurrency.
In some cases, crypto backed by gold is pegged to a certain value, like $1 per token. This makes it easier for investors to know how much value they own without worrying about changes in the price of gold. As the price of gold changes, the cryptocurrency reserve must increase or decrease its gold holdings to ensure it has an equivalent dollar value for the value of tokens it has issued.
Importantly, because gold backed crypto requires vaults of physical gold, many of these cryptocurrencies charge storage fees. Investors should be aware of storage fees when choosing which gold backed cryptocurrencies to buy.
Another thing investors should keep in mind is that cryptos backed by gold are not regulated by government authorities. There are no guarantees that a cryptocurrency that says it is backed by gold has all the gold reserves it claims.
Many reputable gold backed cryptos undergo third-party audits of their gold reserves to prove to investors that their tokens are fully backed by gold as promised.
Is Gold Backed Crypto a Good Investment?
Crypto backed by gold can be a suitable investment in several scenarios.
First, it offers a way for investors to get exposure to the price of gold without actually owning any physical gold or being experienced in trading commodities. Say an investor holds a crypto token that is exchangeable for 1 ounce of gold. If the price of gold goes up, the value of their crypto token will go up by the same amount.
For many investors – both in the crypto market and in traditional markets – gold represents a hedge against inflation. The price of gold typically goes up when the stock market and the US dollar lose value because investors around the world see it as a safe-haven asset. So, gold backed crypto can also serve as a hedge against inflation.
Another potential use case for a cryptocurrency backed by gold is as a reserve currency within crypto markets. Investors may want to trade Bitcoin, Ethereum, or other top altcoins when the crypto market is booming. When the market retraces, they can invest in gold backed cryptocurrencies to weather the storm.
The price of gold does not usually change in response to activity in the crypto market, as other global markets are much larger than the markets for gold backed cryptocurrencies. So, gold backed cryptocurrencies can be stable in price even as the broader crypto market experiences major price swings. Investors who exchange their altcoins for gold backed cryptocurrencies can do so with low fees and will be ready to re-invest quickly in other cryptocurrencies when the market stabilizes.
The Top Gold Backed Cryptos
There are dozens of gold backed cryptos for investors to choose from, each with their own variations on how tokens are intertwined with the gold market. We’ll take a closer look at the top 7 gold backed cryptos for 2023.
1. Paxos Gold (PAXG) – Overall Best Gold Backed Crypto in 2023
Paxos Gold is an ERC20 token that’s fully backed by gold at a ratio of 1 troy ounce of gold per PAXG token. This cryptocurrency is issued by Paxos, a US-based company that’s regulated as a financial custodian by the New York State Department of Financial Services.
PAXG is one of the largest gold backed cryptocurrencies with a nearly $600 million market cap. All of the gold backing this token is stored in Brink’s vaults, which are approved by the London Bullion Market Association (LBMA). Investors in PAXG can exchange their tokens for LBMA gold bullion bars at any time.
As an ERC20 token, PAXG is easy to trade or spend throughout the cryptocurrency universe. It’s available on most major crypto exchanges and has an on-chain Ethereum transaction fee of only 0.02%. There’s no storage fee for holding PAXG, but redemptions for gold incur a variable fee of 0.03-1.00%.
Cryptoassets are a highly volatile unregulated investment product.
2. Gold Coin (GLC) – Fastest Transaction Speeds among Gold Backed Tokens
Gold Coin is another ERC20 token that boasts some of the fastest transaction speeds of any gold backed crypto. Investors can buy and sell GLC and have their transactions confirmed in under 2 minutes. While the coin isn’t designed specifically for trading, this speed is an advantage for investors who want to move money around quickly.
Another benefit to Gold Coin is that there are no transaction fees or storage fees for the coin. GLC can be minted using a proof-of-work algorithm, which provides rewards for miners who help maintain the network.
Each GLC token is backed by 1/1,000th of an ounce of pure gold. GLC can be redeemed for physical gold at any time and all of the cryptocurrency’s gold reserves are audited to maintain investor confidence.
3. Anthem Gold (AGLD) – One Gram of Gold for Every Crypto Token
Anthem Gold is a trusted crypto backed by gold. Every AGLD token is equivalent to 1 gram of physical gold and can be redeemed for gold, Bitcoin, or Ethereum at any time. Anthem Gold’s reserves are stored in a vault in the US and the reserves are routinely audited by Hosho Smart Contract Security.
One of the especially neat things about Anthem Gold is that the company has a live security camera in its vault. Investors who want to see their gold for themselves can access the live stream at any time.
Anthem Gold also offers an affiliate program that enables investors to earn free AGLD. For every additional person an investor signs up, they’ll receive 0.1 AGLD – the equivalent of $6 in gold at today’s prices.
4. DigixGlobal (DGX) – Gold Backed Crypto with Multiple Vaults
DigixGlobal is one of only a handful of gold backed crypto providers that stores its gold reserves in multiple vaults. The company has one vault in Singapore and another in Canada. Both vaults are approved by the LBMA.
Having 2 vaults provides an important extra layer of security. It’s almost impossible for a catastrophe to strike 2 vaults that are thousands of miles apart at once.
DigixGlobal’s DGX token is backed by 1 gram of gold per token. Tokens can be redeemed for physical gold at any time for a 1% fee. DGX is built on the Ethereum blockchain and is available at most major crypto exchanges.
5. Tether Gold (XAUT) – Gold Backed Crypto from the Leading Stablecoin Developer
Tether Gold is a gold backed cryptocurrency from Tether, the company behind the world’s largest stablecoin USDT. Tether Gold has a market cap of more than $430 million, making it one of the largest gold backed cryptos after Pax Gold.
Each XAUT token is equivalent to 1 ounce of a London Good Delivery bullion bar. Interestingly, when an investor buys XAUT, their holding is associated with a specific bar on the blockchain rather than with the reserve in general. This increases accountability and ensures that Tether Gold is fully backed by bullion.
If an investor wants to exchange their XAUT for gold, they can receive their bullion anywhere in Switzerland. Alternatively, Tether Gold will sell an investor’s gold for cash and deliver the cash proceeds. There are no storage fees for Tether Gold, but the company does charge a 0.25% fee on every XAUT purchase.
6. AurusGOLD (AWG) – Gold Backed Cryptocurrency Minted by Gold Miners
Aurus is a cryptocurrency provider that offers tokens backed by a variety of precious metals. The AurusGOLD token, AWG, is backed by gold, but investors can also purchase tokens backed by silver or platinum. Even better, it’s easy to swap among Aurus tokens with very low fees.
The AWG token is backed by 1 gram of gold per token. The gold is stored in vaults around the world, including in Zurich, London, Montreal, Istanbul and Singapore. Aurus purchases gold directly from miners and refineries and only works with businesses that are accredited by the LBMA.
Aurus is also unique in that it offers a DeFi staking platform. Investors can purchase Aurus’s native AWX token and earn rewards in AWG. In effect, this means that investors can stake crypto and earn gold.
7. Meld Gold (MCAU) – Gold Backed Crypto Partnered with Algorand
Meld Gold applies the mechanisms of an algorithmic stablecoin to a gold backed crypto. The platform has built an algorithm that automatically mints and burns tokens in response to the available gold supply in Meld Gold’s vaults. This means that MCAU tokens are always 100% backed by gold at a ratio of 1 gram per token.
Meld Gold can be a little bit more difficult to buy, sell, and store than other gold backed cryptos on this list. That’s because it’s not an ERC20 token and can only be stored in an Algorand crypto wallet. This isn’t one of the best crypto wallets we’ve identified, but it is secure and works with Ledger Nano X crypto wallet.
Meld Gold is available on many major crypto exchanges. The coin can be redeemed for physical gold at any time.
Readers may also be interested in our how to trade Gold guide – many exchange platforms offer CFD trading of Gold, to profit from its price movements without needing to buy gold.
Best Alternatives to Gold Backed Cryptocurrency
While gold backed cryptocurrency can be a good investment in some situations, it’s not necessarily right for every investor. So, we think it’s worth taking a look at two of the hottest cryptocurrencies that are good alternatives to gold backed coins.
1. Battle Infinity – Popular New Cryptocurrency for the Metaverse
Battle Infinity is a new metaverse NFT project that has set out to change the way metaverses work. Instead of a single metaverse that’s completely controlled by the development team, Battle Infinity is developing an ecosystem where users can create their own mini-games in the metaverse. The ultimate result will be what Battle Infinity calls a ‘multiverse of metaverse.’
The team behind Battle Infinity is kicking off this multiverse with a new play-to-earn fantasy sports game called IBAT Premier League. It’s modeled on India’s ultra-popular Cricket Premier League and enables players to build their own sports teams in the metaverse. Winning players at the end of the season will be rewarded with IBAT, the native cryptocurrency of the Battle Infinity platform.
IBAT is central to the economy of Battle Infinity. In addition to being offered as a reward for players, it’s used to buy NFTs, in-game upgrades, and more. IBAT can also be staked to the platform to earn ongoing rewards for users.
Battle Infinity is nearing the completion of Phase 3 of its 7-phase development roadmap. As such, the platform is now offering IBAT tokens to early investors through one of the best crypto presales of 2023.
The presale runs for a limited time only and investors can buy IBAT using BNB at a discounted rate to the coin’s future ICO. This is a great opportunity for investors who want to get in early on a crypto with a lot of potential.
|Minimum Investment||0.1 BNB|
|Maximum Investment||500 BNB|
|Chain||Binance Smart Chain|
|Presale Start Date||11th July 2022|
|Presale End Date||10th October 2022|
How to Buy Battle Infinity
Battle Infinity’s IBAT token isn’t yet available on any crypto exchange. Here’s how investors can purchase IBAT during the presale.
Step 1: Download Metamask
To buy IBAT, investors will need a crypto wallet with BNB in it. We recommend using Metamask, a popular and secure crypto wallet that can be installed in most browsers.
Step 2: Buy BNB
Visit eToro’s website and buy Binance Coin (BNB) and add it to the Metamask wallet. eToro offers low fees for buying BNB and is very user-friendly.
Step 3: Visit Battle Infinity’s Presale
Head to Battle Infinity’s website and click ‘Launch Presale.’ Then select ‘Connect Wallet’ to connect a Metamask wallet to the platform.
Step 4: Buy IBAT
Enter the amount of IBAT to purchase in BNB. During the presale, 1 BNB is worth 166,666 IBAT and the minimum purchase is 0.1 BNB. Click ‘Purchase IBAT’ to complete the purchase and transfer the IBAT to the Metamask wallet.
2. Tamadoge – Deflationary Cryptocurrency for a Play-to-Earn Game
Another alternative to gold backed cryptocurrencies that’s worth exploring is Tamadoge. This is a new play-to-earn crypto game in which players get started by purchasing a virtual NFT pet. Each pet has its own strengths and weaknesses, and players can shape their stats as they nurture their pet towards adulthood.
Once the pets grow up, players can battle them against other pets in Tamadoge’s virtual arena. Battle winners climb the game’s leaderboard and are rewarded with TAMA, the platform’s native cryptocurrency. Players can use TAMA to purchase additional NFT pets as well as in-game upgrades that increase their chances of winning battles.
Importantly for investors, TAMA is a deflationary token. 5% of the TAMA used for every sale in the Tamadoge marketplace, including NFT pet purchases, is burned. So, as more players join Tamadoge and demand for TAMA increases, the supply will diminish at an increasingly fast pace. That could ultimately lead to skyrocketing prices – good news for early investors.
Investors have a chance to buy TAMA now through a limited-time crypto crowdsale. Tamadoge is offering TAMA at a discount to the anticipated future ICO price, but only up until the crowdsale’s cap is reached. Tamadoage is expected to launch later this year and early investors will have first access to mint their virtual pet NFTs.
|Min Investment||1,000 TAMA (∼$10 + gas fee)|
|Purchase Methods||ETH, USDT, Debit / Credit Card (via Transak)|
|Beta Sale Ends||2nd September 2022|
|Presale Ends||Q4 2022|
How to Buy Tamadoge
Investors can buy TAMA right now through the crypto crowdsale on Tamadoge’s website. Here’s how.
Step 1: Download Metamask
Download the Metamask crypto wallet and install it in the web browser. Investors do not need to purchase crypto at this time since Tamadoge accepts credit cards.
Step 2: Visit Tamadoge’s Presale
Head to Tamadoge’s website and click ‘Buy’. Then connect the Metamask wallet by clicking ‘Connect Wallet’.
Step 3: Buy TAMA
Enter the amount of TAMA to purchase and choose a payment method. Tamadoge accepts credit cards, Ethereum, and USDT. All purchased TAMA will be released to investors at the end of the presale. Keep in mind that at least 1,000 TAMA ($10 plus a small gas fee) need to be purchased to complete a transaction.
Cryptocurrency backed by gold can be suitable for investors who want financial exposure to the price of gold or who are looking for a relatively stable coin during periods of market volatility. However, we think hot new cryptocurrencies like Battle Infinity and Tamadoge are more attractive investments for many investors.
Battle Infinity is building a new metaverse platform with play-to-earn crypto games and a complex economy built on IBAT. Tamadoge is a play-to-earn crypto game with a deflationary token that could take off as more players join the game. Check out the Battle Infinity and Tamadoge presales at the links below.
Battle Infinity - New Metaverse Game
- Listed on PancakeSwap and LBank - battleinfinity.io
- Fantasy Sports Themed Games
- Play to Earn Utility - IBAT Rewards Token
- Powered By Unreal Engine
- Solid Proof Audited, CoinSniper Verified
Tamadoge - The Play to Earn Dogecoin
- '10x - 50x Potential' - CNBC Report
- Deflationary, Low Supply - 2 Billion
- Listed on OKX, Bitmart, LBank, MEXC, Uniswap
- Move to Earn, Metaverse Integration on Roadmap
- NFT Doge Pets - Potential for Mass Adoption