Gold prices differ in Biden’s first 100 days as compared to Trump’s.

Historically, gold prices rise during inauguration years by an average of 15%. When Trump took office, his first 100 days saw a series of international policies cut short, financial regulatory reforms, travel bans and international attacks that prompted gold to edge up in price. As such, it would come as a surprise to see the price of gold dropping as many expect Biden’s first 100 days to consist of socioeconomic policy reforms and executive orders.

Since taking office, President Biden has already signed 42 executive actions, kickstarting a wave of socioeconomic changes tackling healthcare costs, climate change threats, advancing racial equity, COVID relief and supporting a crippling economy. In particular, his crusades to combat climate change and COVID-19 have stood out as prominent policies that can significantly dent the US’s fiscal expenditure, drawing greater demand for gold.

How has gold been impacted by the new presidential era?

The proposed US$1.9 trillion COVID stimulus relief could positively impact gold as it amplifies the already large expenditure by further raising the country’s fiscal deficit. Many investors are concerned about the potential risks and inflation as a result of expanding fiscal deficit, low-interest rates and growing money supply.

Low-interest rates and high financial stress tend to foster demand for gold. In an economy that is experiencing inflation and pullbacks in the equity market, pulling back the price of gold is expected to increase. Traditionally the price of gold increased 15% on average when inflation was higher than 3%.

Additionally, reversing the previous administration’s climate-change denialist policies, the Biden administration’s ambitious US$2 trillion climate plan aims to champion renewable and clean energy. Investors have speculated that such regulatory changes and large expenditure could potentially place more strain on the US’s debt, further aggravating the already high debt ceiling that has reached the highest since 1946. With the growing emphasis on renewable energy, other precious metals are gaining prominence and performance where silver, for example, has benefited from the emerging industrial applications from the growing demand for solar energy.

With Biden shouldering a pandemic-stricken economy and record-high daily infections, his administration has greater challenges that could push the price of gold higher regardless of his policies and orders.

How does this impact other safe-haven assets such as bitcoin?

Some economists stipulate that the stimulus package will in turn boost economic activity by 4 percent at the end of 2021, reaching the pre-pandemic GDP projections. With Bitcoin’s increasing demand due to growing legitimacy from institutional backers and softening government stance, gold will face stiffer competition. BlackRock’s recent addition of Bitcoin futures on two funds and Biden’s speculated crypto-friendly administration, are signs that Bitcoin is gaining acceptance among institutional investors.

Many investors are rushing into the new digital assets, mostly betting big on the highly volatile Bitcoin. One raising concern is these digital assets do not have a long enough history to establish their position as an effective hedge. Bitcoin, in particular, swung wildly in the last year alone and for reasons that are barely related to anyone’s view on inflation.

As Bitcoin is gearing up to battle with gold, its value as a store of value is debatable as its volatility clouds its value over a longer time horizon. Biden’s large fiscal spending in his first 100 days, is likely to push the gold prices higher with greater US debt and economic uncertainty in the midterm. However, the increase may be minimal due to gold’s competition with Bitcoin, silver’s rise to meet renewable energy demands and strengthened economic activity from the stimulus boost. Nonetheless, gold is still a time-proven safe-haven asset and a good hedge against any investment.

Disclaimer: This article is written to express my own opinions. It is not a piece of investment advice from Digix. Digix’s blog may contain statements and projections that are forward-looking in nature, and therefore, inherently subject to risk, uncertainties and assumptions. Do take into consideration your own unique investment situation, objectives, risk tolerance and investment horizon in any investment decision.

About Digix

Digix, incorporated in Singapore in 2014, is the blockchain company behind the world’s first gold-backed digital asset class. Digix uses blockchain to account for the authentication and provenance of 99.99% investment-grade gold bullions. Physical gold bars are registered on the blockchain, and every 1 gram of physical gold registered is pegged to 1 DGX token. The physical gold bars are kept in vaults located in Singapore and Canada.

Digix recently won the 2020 S&P Global Platts: Precious Metals Industry Leadership Award and was a finalist in the 2016 Singapore MAS Fintech Awards.

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We would love to hear from you!

At Digix, we appreciate feedback from the community, so do drop us a note at marketing@mailer.digix.global. If you have any question, do check our FAQ on https://digix.zendesk.com/hc/en-us

How are gold and other safe-haven assets shaping up with the Biden Administration? was originally published in Digix Official Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

Marking a year of unprecedented challenges — from a global health crisis, a stock market crash and industries confronted with the new normal — in this article we’ll celebrate the digital triumphs that emerged, uncover how they shaped innovation and look ahead at the digital asset landscape of 2021.

Gold’s Rise Amidst Global Challenges

Like many other safe-haven assets, gold has had a spectacular year. For the first time on record, the precious metal soared beyond US$2,000 per ounce in August this year as investors sought gold to hedge against the pandemic stricken economy, raising prices as high as US$2,070.05. When mass lockdowns were enforced across the world, panic buying of the precious metal raked in a record-breaking US$23 billion of gold exchange-traded funds in just the first quarter of 2020 alone.

The surging demand for gold has shown yet again the tight relationship between gold and the health of the economy, in which gold prices swing upward during volatile market conditions. In times of crisis, investors flock to safe-haven investment alternatives, like in 2009, the Great Recession triggered a 12.8 percent increase in the price of gold as the US Federal Reserve made calculated moves to inject liquidity into the economy to ease the value of the US dollar.

In a similar rehash of history, the price of gold in this pandemic economy soared to new heights as the outbreak raged on, panic buying emptied supermarket shelves, the stock market crashed and investors sought out the recession-proof metal in a bid to safeguard their wealth.

Digital Gold: A Growing Asset Class

With the rising demand and interest in gold, the sector faced new challenges. Just like many others, traditional commodities were hit hard by COVID-19 and the gold industry was no exception.

Faced with restrictions, some mining activities and refineries came to a halt, as grounded ships and flights decreased transportation capacity and increased costs resulting in a physical supply shortage of gold. Yet, the demand for the precious metal remained at an all-time high as fears of economic uncertainty caused by the coronavirus continued.

Witnessing obstacles faced by the traditional gold industry, we are reminded once again of the promises of digital gold. With gold on the blockchain, digital gold can avoid supply chain disruptions, dodge high costs that often come with storing and insuring physical gold bullion and reach investors from all around the world. Investors can also purchase gold in smaller increments, widening the access to the precious metal and democratising its benefits all to enjoy.

As such, it comes to no surprise that during this period, Digix saw an uptick in DGX holders over the course of the outbreak. The rise in DGX users has also reaffirmed our vision and mission to champion financial inclusion by breaking down the barriers to investing and facilitating easier access for a wider pool of retail investors to access the promises of gold.

Bitcoin’s Rally and its Impact on Gold

As we continue to chart the rise of the yellow metal, bitcoin too has made its mark in 2020. At the start of the pandemic, bitcoin prices gained 30 percent from the end of 2019, marking a strong start for the cryptocurrency early on in the year. With no sights set on slowing down, the coronavirus rampage across the globe has pushed the historically volatile digital asset to trend consistently over the months while most of the world remained under lockdown.

The surprising stability of bitcoin moved in tandem with the safe-haven favourite — gold, raising questions as to whether bitcoin is closing up to becoming akin to the precious metal. Most recently, bitcoin rallied at an all-time high, breaking its prior record set in December 2017, reigniting speculations of the digital asset claiming the “digital gold” title once more.

Despite bitcoin being compared to digital gold, the systematically volatile asset has made it difficult to replace the yellow metal. Considering bitcoin’s 6-year high volatility earlier in the year and consistent price fluctuations, the cryptocurrency still has a long way to go before it can match gold’s consistent track record and strong investor reputation to fairly claim the title of “digital gold”.

As we continue to battle the challenges of the coronavirus, it will take months before we return to life as we knew it. Even with a long-awaited vaccine, it’s probable that gold will sustain its high prices and be strengthened by investor confidence for its reliable safe-haven status.

New Year, New Obstacles, New Heights to Reach

As we look to welcome 2021, the digital gold industry will be pressed with new challenges. With the rising demand of digital gold, it will become more pertinent to streamline the user experience, improve liquidity and scalability and ensure the authenticity of gold. With newer innovation and greater adoption of digital technologies, we can expect digital gold and other digital assets to enjoy greater:

• Accessibility: As we witness the mass push for digital options from payments to banking and investing, digital gold has seen a substantial increase in volume from the previous year. We can expect a greater demand for digital assets from Latin American countries and Indonesia as crypto adoption continues to gain traction across these nations. Digital gold also has a promising future in Indonesia as it gains momentum from the backing of regional powerhouses like Gojek who recently forayed into the digital gold sector, launching GoInvestasi. With the gaining investor interest in digital assets and the increased number of investment options, accessibility to digital gold is expected to increase as the industry continues to mature.
• Market Infrastructure: Major banks from across the world are already looking towards digital assets. From Banque de France looking to use the digital euro in interbank settlements to China’s central bank’s ambitions to introduce a sovereign digital currency and DBS’s recent launch of a digital exchange, it is becoming more apparent that digital assets have the support from traditional financial institutions. With the backing of reputable institutions, the digital assets market will gain greater reputation, demand and interest, pushing the industry to higher frontiers.
• Funding: With the growing importance of digital assets, more governments are launching blockchain programmes to support developments in the space. The Singapore government, for example, has recently launched a new research programme with S$12 million in funding, aimed to commercialise and encourage the adoption of blockchain technology. Having the growing support from regulatory powers and governments, the digital assets sector can expect to grow even further in a conducive blockchain ecosystem.

As we look forward to the year ahead, we are confident that the digital gold landscape will get the attention of the investment community, governments and leading institutions to continue its mission to democratise wealth and investment opportunities for all.

Disclaimer: This article is written to express my own opinions. It is not a piece of investment advice from Digix. Digix’s blog may contain statements and projections that are forward-looking in nature, and therefore, inherently subject to risk, uncertainties and assumptions. Do take into consideration your own unique investment situation, objectives, risk tolerance and investment horizon in any investment decision.

About Digix

Digix, incorporated in Singapore in 2014, is the blockchain company behind the world’s first gold-backed digital asset class. Digix uses blockchain to account for the authentication and provenance of 99.99% investment-grade gold bullions. Physical gold bars are registered on the blockchain, and every 1 gram of physical gold registered is pegged to 1 DGX token. The physical gold bars are kept in vaults located in Singapore and Canada.

Digix recently won the 2020 S&P Global Platts: Precious Metals Industry Leadership Award and was a finalist in the 2016 Singapore MAS Fintech Awards.

Twitter |Facebook |Instagram |Youtube |LinkedIn | Reddit | Telegram | Newsletter | Weibo微博

We would love to hear from you!

At Digix, we appreciate feedback from the community, so do drop us a note at marketing@mailer.digix.global. If you have any question, do check our FAQ on https://digix.zendesk.com/hc/en-us

Gold in the Year of Pandemic: Challenges that defined digital gold’s shine was originally published in Digix Official Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

Historical Gold Price Movements

There has been little evidence of a clear relationship between the gold price and election outcome based on party affiliation. The price of gold has recorded better and worse years under the leadership of both parties and even exhibited contrasting performance under the same administration during two successive terms.

The world is expected to witness as much turbulence and polarisation as the first term should there be a second Trump administration. This adds further volatility and uncertainty across traditional markets. However, the potential for radical policies could be lower in the second term should Congress remain divided.

A Joe Biden win would represent a return to a more conventional administration; One with an ambition to restore the US’ previous multilateral stance on the foreign policy front. This presumably results in less volatility, political risks and international tensions.

Efforts to attribute a specific market reaction based on a candidate’s party affiliation is a practice of nuance especially when external fundamental factors like seasonality and economic cycle are taken into consideration. Many contrasting observations can be made from different regimes as financial markets have seen bubbles and crashes during various presidencies.

Gold in 2016 Election

Back in the 2016 election, gold failed to rally after Trump’s win. Gold prices spiked by as much as 5% before easing back. Prices saw a lower finish after Trump’s 2016 win as uncertainties were raised with Trump’s unorthodox approach to politics.

Before the 2016 election, gold prices were expected to benefit no matter who was elected president — with a Trump win potentially disruptive politically and economically, and a Clinton win seens as inflationary.

The gold price retreats after an initial surge on US election result. Price of gold fell back from sharp gains after a conciliatory victory speech from Trump which helped the dollar rebound. His speech was conciliatory and had none of the harsh rhetoric echoed during the campaign. It calmed the markets and boosted the dollar.

Gold price expectations for 2020 Election

UBS tells clients to prepare for the contested election by buying gold. They are wary of the increased stock market volatility and advised clients to buy safe-haven assets like gold. With questions raised on the peaceful transfer of power if he lost and a possible contested election outcome may fuel further volatility and result in safe-haven flows.

To consider the 3 possible scenarios:

Scenario 1: Biden wins a full sweep at the election resulting in the Democrats controlling the house and the senate:

• With Biden’s favour for a greener economy, he is expected to make regulatory changes that can improve the future of the country but increase national debt at a time when it’s already high
• Biden is expected to bring in corporate and capital gains, tax hikes and industry regulations, there is expectations that this would put further strain on the value of the dollar, which is bad for US stocks but positive for the price of gold.

Scenario 2: Biden wins the election but not the senate:

• Trump’s tax regime will likely remain despite Biden’s win. In this scenario, this may keep the markets steadier, changes will be less impactful and uncertainty reduced.
• Biden will likely clam trade relations with China and lift various sanctions on foreign countries, benefitting the stock market but reducing demand for gold.

Scenario 3: Biden loses and Trump wins.

• If Trump wins yet another election, his continued stance on international relations, the trade war with China and an unpredictable political approach may set prices of gold rallying high.
• With the COVID-19 outbreak placing added uncertainty and Trump’s pro-resource sector stance, prices of gold may possibly remain high should Trump win his re-election.

Market predictions for gold post-election

With the US’s third wave hitting a new record high of daily COVID-19 infections and the pandemic likely to continue into 2021, it is probable if gold sustains its high prices. Especially with the approaching winter, the US and Europe now face a new uphill battle with the coronavirus which may likely continue uncertainty in the market.

Gold prices were previously seen to be ending lower with the promises of a vaccine for COVID-19, prompting an early rally in the US stock market and global stocks surged with trader optimism building and dulling haven demand for the precious metal. However, with continued doubts on Russia’s COVID-19 vaccine and challenges faced by vaccine trials, the price of gold may continue high against weakened investor confidence in the economy.

Increased demand in gold

Investors around the world are witnessing huge shifts in the market — this has been caused, in large part, COVID-19, which has led to one of the biggest economic downturns since the 1929 Wall Street Crash and subsequent Great Depression.

With Asia being the first region to be impacted by the coronavirus, there was a noticeable rise in gold investments in East Asian countries in February — a gold rush that happened much earlier than the West, which only saw an uptick in gold demand in April when the virus began spreading rapidly through western countries. This is a clear depiction of gold’s correlation to ongoing economic conditions and reinforcing its position as a safe-haven asset for retail investors looking for financial security amidst uncertain volatile economic conditions.

As tensions between the US and China continue to rise, we are witnessing an increasing number of investors turning to gold as NASDAQ begins implementing new measures tightening listing rules for Chinese IPOs.

However, before this, investors were already reacting to changing economic and political realities across North America, the United Kingdom, Europe, and Asia — such as Brexit, repeated climate crises, the situation in Hong Kong, the trade conflict between Japan and Korea, and tensions between the United States and China and Iran.

Even previously “safe” markets and markets witnessing high rates of return for investors have experienced a sharp downward trend in recent months, with everything from traditional stocks and bonds to the technology sector and China’s huge manufacturing sector witnessing a marked slow down.

Economies have, almost without exception, experienced a marked decline in growth and many of the world’s leading economies have contracted this year, and many next year as well.

For many investors, gold stands out as an obvious choice when it comes to diversifying their portfolio. As a longtime safe-haven asset it has been called “recession-proof” by some leading investment experts and is largely uncorrelated with monetary markets and economic fluctuations.

What is the outlook of gold for this year and for the next 5–10 years?

With Australia outpacing China to become the world’s top gold producer by 2021, it is possible to witness an increasing rise of retail investments in gold within the Asia Pacific region.

Home to some of the largest gold buyers in the world — from India, China, Singapore and Hong Kong — the increase in gold supply within the region will benefit many regional buyers who often buy gold as a store value.

However, with the uncertainty of the COVID-19 pandemic, the volatile market and unpredictable economy have made it difficult to ascertain how the industry will evolve and the true impact of Australia’s gold supply on the regional gold industry.

With the global impact of COVID-19, some of the world’s economic leaders — from Japan, Hong Kong and Germany — are already feeling the recession pinch, and it is possible to witness increasing demand for safe-haven assets such as gold.

We have already seen an increasing number of digital gold users in the past 2 months. This shift to digital gold could be attributed to its affordability and accessibility especially during times of inconvenience where gold supply has become disrupted by limited economic activities.

As the impact of the pandemic is expected to last for a long time, it is probable to see such a trend extended over the next few years.

How can modern technologies help the gold industry overcome issues of increased demand?

Digital gold makes it easier than ever before to micro-accumulate gold — in as little as 1 gram increments — meaning that people don’t need a lot of capital to enter the market.

Being able to buy online and receive confirmation of the transaction, as well as removing the onus of custody gold yourself, digital gold means that consumers can buy, trade, and sell gold from home — which has never been more important now than ever, with increasing practices of safe distancing.

Digital gold also allows consumers access to physical bullion stored as far away as Canada — meaning that it lends greater liquidity to the market. Amidst an increased demand for gold as a result of ongoing economic volatility, the industry experienced noticeable shortages in physical dealerships as refineries had to temporarily shut down as a result of worldwide lockdowns. Ultimately, digital gold is a simpler, more accessible means for everyday investors and consumers to protect their wealth at a time of unprecedented risk to the economic status quo.

Disclaimer: This article is written to express my own opinions. It is not a piece of investment advice from Digix. Digix’s blog may contain statements and projections that are forward-looking in nature, and therefore, inherently subject to risk, uncertainties and assumptions. Do take into consideration your own unique investment situation, objectives, risk tolerance and investment horizon in any investment decision.

About Digix

Digix, incorporated in Singapore in 2014, is the blockchain company behind the world’s first gold-backed digital asset class. Digix uses blockchain to account for the authentication and provenance of 99.99% investment-grade gold bullions. Physical gold bars are registered on the blockchain, and every 1 gram of physical gold registered is pegged to 1 DGX token. The physical gold bars are kept in vaults located in Singapore and Canada.

Digix recently won the 2020 S&P Global Platts: Precious Metals Industry Leadership Award and was a finalist in the 2016 Singapore MAS Fintech Awards.

Twitter |Facebook |Instagram |Youtube |LinkedIn | Reddit | Telegram | Newsletter | Weibo微博

We would love to hear from you!

At Digix, we appreciate feedback from the community, so do drop us a note at marketing@mailer.digix.global. If you have any question, do check our FAQ on https://digix.zendesk.com/hc/en-us

Gold Price Movements After U.S. Elections —  The Past, Present and Future. was originally published in Digix Official Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

How Much Trusts Can You Place In The Currency?

Although many investors feel that “cash is king” in times of economic uncertainty — this is not exactly true. The world’s reserve currency has seen a downward trend due to the declining confidence in the U.S. dollars and the falling yields from U.S. bonds. On the other hand, gold prices have been steadily inching upwards, showing a clear demand for the safe-haven metal.

While fear of further market decline and economic uncertainty play a part in pushing the gold price, the rise of gold price is further propelled by the excessive printing of fiat currency by the U.S. Federal Reserve to pay off the nation’s debt. This reduced investor’s confidence in the dollar as anyone who owns the currency owns a piece of the nation’s debt.

In a recent interview, Mr Warren Buffett shared his view on the greenback.

“You better own something other than debt.”

The dollar carries the debt of the world as the United State borrows from its own currency by printing billions out of thin air. The increase in supply and reduced interest rate, led to inflation that is hidden in the asset prices rather than consumer prices.

How Gold Can Keep You Out Of Trouble

Gold price rises in time of crisis. During the Great Depression, multiple banks were failing and fear had everyone hoarding gold for protection. The gold price jumped from $20.67/ounce in 1929 to $25/ounce in 1934. A similar price movement was observed while looking back at the recession in 2008 — The gold price raised to $1,000 an ounce before falling under $800 and bouncing back as the stock market crashed.

Fast forward to early 2020, gold price was steadily increasing to $1,575 before the outbreak of Covid-19 pandemic. The pandemic led to a drop in the value and the price of gold has been bullish since then. The value of gold has reached an all-time high of $2,073/ounce in Q3 with some believing that the true peak, $3,000/ounce, has yet to be reached.

Leveraging gold as a hedge for an investment portfolio is a proven tail-hedging strategy in adverse markets during the 2008 financial crisis, European sovereign debt crisis and 2018 December stock market pullback. Gold offers liquidity during times of crisis as it is positively correlated in a risk-on environment, yet becomes increasingly negatively correlated in risk-off environments.

You’re Losing Value By Not Holding Gold

Many say that gold prices reveal the true state of economic health. A high gold price is the signal for an unhealthy economy. Savvy investors are rushing to buy gold as protection against a potential crisis or inflation amidst the dwindling returns from stocks, bonds and real estate. One thing for sure, gold prices can sometimes be used as an indication on what savvy investors know about economic health.

The rising geopolitical tensions and Covid-19 pandemic around the world have driven the economy toward a state of uncertainty. Excessive money printing, an ongoing global pandemic, and geopolitical tensions has sent every nation’s GDP forecast spiraling downhill — the only two safe-haven assets that are trending the opposite direction are old and bitcoin. While it is no secret that gold is a time-tested safe-haven, many do not know that the future of gold is rapidly evolving for the better.

Over the last 2 years, new utilities have been built upon gold with the growth of blockchain. It is possible to store gold in a personal ethereum wallet and make payment in gold. Gold is no longer only an investment tool nor a store of value. With the adoption of blockchain, anything can be backed by gold instead of currency.

Imagine a future where your favorite artwork is backed by real-life gold and traded as non-fungible tokens (NFT) within a digital landscape.

Disclaimer: This article is written to express my own opinions. It is not a piece of investment advice from Digix. Digix’s blog may contain statements and projections that are forward-looking in nature, and therefore, inherently subject to risk, uncertainties and assumptions. Do take into consideration your own unique investment situation, objectives, risk tolerance and investment horizon in any investment decision.

About Digix

Digix, incorporated in Singapore in 2014, is the blockchain company behind the world’s first gold-backed digital asset class. Digix uses blockchain to account for the authentication and provenance of 99.99% investment-grade gold bullions. Physical gold bars are registered on the blockchain, and every 1 gram of physical gold registered is pegged to 1 DGX token. The physical gold bars are kept in vaults located in Singapore and Canada.

Digix recently won the 2020 S&P Global Platts: Precious Metals Industry Leadership Award and was a finalist in the 2016 Singapore MAS Fintech Awards.

Twitter |Facebook |Instagram |Youtube |LinkedIn | Reddit | Telegram | Newsletter | Weibo微博

We would love to hear from you!

At Digix, we appreciate feedback from the community, so do drop us a note at marketing@mailer.digix.global. If you have any question, do check our FAQ on https://digix.zendesk.com/hc/en-us

The Essential Tips on Gold You Should Know was originally published in Digix Official Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

Digitization is transformational

Digital transformation is disrupting the business model of every organization for the better — enabling companies to scale to greater heights, maximize growth opportunities and build new, efficient business models. 70% of digital transformation failed due to common pitfalls such as poor cross-functional collaboration and a lack of accountability. To address existing pitfalls, the vision to build a fully connected technological ecosystem that is transparent,trust-able and interoperable will allow organizations to future proof their businesses for the years to come.

Blockchain, without a question, is one of the most promising and transformational technologies that drives this vision. It disrupts the value chain and tears down boundaries to drive innovations beyond the imagination. Traditional businesses are facing threats from new blockchain start-ups and run the risk of an eventual displacement. This digital revolution brought forth by the blockchain has impacted every industry profoundly, including the precious metal industry.

The Value of Gold

Gold has maintained its value and built its reputation as a ‘recession-proof” asset class that is largely uncorrelated with traditional market movements and economic fluctuations. This is due to the fact that currency devaluations will never apply to physical commodities like gold — as it cannot be printed like money and its value is not impacted by a government’s decision to change interest rates or to increase the circulation of a particular currency.

Gold is a strong contender to hedge against recession and other economic uncertainties. When most of the world was in lockdown, many turned to this safe-haven metal with investors hitting a record US$23 billion of exchange-traded funds that hold gold in the first quarter alone. Most recently, the second-wave fears have once again pushed gold price up, marking its highest peak in 8 years. Many have even speculated that gold will hit US$2000 in the coming year should the precious metal reenact its gains following the 2008 Global Financial Crisis.

Digitizing gold is like the future reaching out to the past. Reinvigorating the purpose of gold with a touch from modern technology. Gold is made divisible, portable and transferable on the blockchain. This innovation is an integration of physical and digital experience of gold as an investment instrument.

The Challenges of Digitizing Gold

Financial institutions and large corporations have spent an exorbitant amount of resources in digitization — but still face issues when it comes to cybersecurity. However, the emergence of blockchain technology solves existing issues and opens up a new avenue for gold to be placed on the digital realm. Having said so, there are challenges to bring gold to blockchain.

Challenge 1 — Verifying Authenticity of Gold Token

While every gold token minted on the blockchain is backed by its underlying gold asset, it is imperative to verify and certify the authenticity of the underlying gold asset. This sits at the centre of gold digitization.

Traditional digital asset dealers and custodial services keep digital ownership, along with customer data, in centralised servers. Data can be altered or breached by bad actors internally or externally. This leads to scrutiny on data security and the infrastructure within centralised locations as we know.

In addition to the possibility of the above malicious acts, digital assets on the blockchain may be duplicated or forged in error. The Proof of Provenance (PoP) protocol is the proprietary intellectual property by Digix to mitigate these problem problems. Coupling the Ethereum blockchain with the Interplanetary File System (IFPS), a protocol is created for a safer and more transparent model to record digital assets on the blockchain.

Every audit record and corresponding documentation confirming the authenticity of the gold bars are put into a Distributed Database (IPFS). These documents contain an IPFS reference to a signed paper documentation — the auditor’s Ethereum identity. The audit trails are then sent as transactions to the Ethereum blockchain.

Challenge 2 — Building Trust with Technology

Gold tokenization is a disruptive technology that encourages traditional businesses to innovate as we meet tomorrow’s unknown challenges. The heart of this successful digital transformation lays in articulating a clear digital visions that should revolve around any or all of the followings:

• Build higher level of customer trust in the new digital economy
• Support and establish new norms of ethical behaviour
• Respect for data and customer experience

Digix’s PoP protocol consists of multiple independent participants, namely asset providing vendors, asset custodians and auditor-in-charge, acting together to prevent dishonest collusion. The Proof of Provenance protocol requires regular quarterly audits to be performed by a 3rd party auditor on the entire collection of gold assets held in the custodian vaults. The auditor-in-charge then submits a record on the gold registry contract for each and every underlying gold bar that has been audited. Digix works with an independent auditor ( inspectorate bureau veritas) to prevent bullion fraud.

To build a higher level of trust, anyone with access to the internet will be able to browse through the gold and verify the underlying gold bar via the asset explorer, through which the important information can be reviewed.

• Audit Documentation
• Chain of Custody Digital signatures (Vendors, Custodian and Auditor)
• Depository Receipt
• Gold Bar serial number
• Gold Purchase Receipt
• Inventory Receipt
• Time Stamp

Challenge 3 — Maintaining a Robust Market Depth and Liquidity of Gold-Backed Tokens

Liquidity is the ability to be traded on demand. High liquidity implies that many parties are trading the asset in significant sizes without large variances. Gold is a very liquid asset and the market liquidity is a market’s ability to purchase or sell an asset at stable prices.By tokenizing gold, gold tokens can be traded on secondary markets such as crypto exchanges. This further increases the liquidity, thus giving the traders more freedom to buy and sell.

With tokenization, greater value can be captured from the underlying asset and this improves the liquidity to vastly increase the volume of trades. Cryptocurrency market capitalization currently stands at $323bn USD. In comparison, the biggest and most accessible digital gold product, GLD Gold ETF, is trading at around $170 bn USD. That is of course in comparison to the entire universe of trading assets, from FX, fixed income, commodities to equities.

Improving the accessibility of Digix gold-backed token (DGX) is the first step to build out a liquid market. The horizontal expansion plan was to list DGX tokens across exchanges, thus allowing the tokens to be more accessible, cheaper, faster and easier to trade. DGX token is currently listed across 12 centralised and decentralised exchanges with the offer for traders to trade in fiat and/or cryptocurrency.

The second step to making the market a much more liquid one to trade on is to work in tandem with technology. The recent development of Decentralised Finance (Defi) and Decentralised Exchanges (DEX) presented new technologies to build a market with robust liquidity. Among the list of technologies, two technologies worth highlighting are:

• Uniswap Liquidity Pool
• Kyber APR: Automated Price Reserve

Unlocking the Long-Term Value of Gold

In today’s financial markets and ever-changing digital landscape, liquidity and risk management is more difficult than ever. Gold-backed tokens offer gold buyers an alternative gold product to greater security and confidence for the future.

“Innovation is the ability to see change as an opportunity — not a threat” — Steve Jobs.

Gold digitization brings about new utilities that can be built upon the underlying gold assets. Developers can use Digix tokens for DApp to facilitate payment, borrowing and lending. Games can issue gold tokens that are backed by real-life gold. Investment grade gold tokens can be moved across borders in minutes.

These are exciting times ahead as we stand at the forefront of many disruptive technologies that will disrupt the industry in time.

About Digix

Digix, incorporated in Singapore in 2014, is the blockchain company behind the world’s first gold-backed digital asset class. Digix uses blockchain to account for the authentication and provenance of 99.99% investment-grade gold bullions. Physical gold bars are registered on the blockchain, and every 1 gram of physical gold registered is pegged to 1 DGX token. The physical gold bars are kept in vaults located in Singapore and Canada.

Digix recently won the 2020 S&P Global Platts: Precious Metals Industry Leadership Award and was a finalist in the 2016 Singapore MAS Fintech Awards.

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We would love to hear from you!

At Digix, we appreciate feedback from the community, so do drop us a note at marketing@mailer.digix.global. If you have any question, do check our FAQ on https://digix.zendesk.com/hc/en-us

The 3 Challenges that Digix Overcomes to Digitize Gold. was originally published in Digix Official Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

Please note that there will be a 1% fee to perform a recast. Therefore, you will need at least 101 DGX tokens in your wallet to successfully perform a recast.

Upon a successful recast, the system will set a reminder a week before the scheduled collection date.

If you do not collect the gold bar by the agreed date, the gold bar will automatically be reminted into DGX

Step 1

Look for the recast section after logging into your dashboard and start by loading your wallet

Step 2

Select the gold bar of your choice from the asset explorer. You will have to decide on the location of vault for redemption at step.

Step 3

Selected gold bars will have a green tick next to the item.

Step 4

Confirm your recast on your ledger and confirm the transaction.

Step 5

After the transaction is approved on the blockchain, a reminder will be sent to your registered mailbox a week before redemption date.

About Digix

Digix, incorporated in Singapore in 2014, is the blockchain company behind the world’s first gold-backed digital asset class. Digix uses blockchain to account for the authentication and provenance of 99.99% investment-grade gold bullions. Physical gold bars are registered on the blockchain, and every 1 gram of physical gold registered is pegged to 1 DGX token. The physical gold bars are kept in vaults located in Singapore and Canada.

Digix recently won the 2020 S&P Global Platts: Precious Metals Industry Leadership Award and was a finalist in the 2016 Singapore MAS Fintech Awards.

Twitter |Facebook |Instagram |Youtube |LinkedIn | Reddit | Telegram | Newsletter | Weibo微博

We would love to hear from you!

At Digix, we appreciate feedback from the community, so do drop us a note at marketing@mailer.digix.global. If you have any question, do check our FAQ on https://digix.zendesk.com/hc/en-us

How to recast your DGX was originally published in Digix Official Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

Singapore, 20 July 2020 — Digix, creator of the world’s first asset-backed digital gold token, has today announced a partnership with Axie Infinity, a game built on Ethereum that enables players to collect, raise and battle fantasy creatures. This partnership will enable Axie Infinity players to receive in-game tokens that are backed and redeemable for physical, investment-grade gold.

In an industry first, real gold rewards will be offered as an in-game currency via Axie-DGX tokens which can be exchanged for Digix’s native token, DGX — where 1 DGX is equivalent to 100000 Axie-DGX. Axie Infinity is a digital pet community that lets players battle, collect, trade and raise Axies, where players can power-up these fantasy creatures through minigames, quests, contests, and special in-game events. Powered by Ethereum, the Axie Infinity marketplace is transparent, liquid, and secure, enabling players to have complete ownership of their Axies and the ability to trade and sell them in a secure manner.

Shaun Djie, COO and Co-Founder of Digix said: “This collaboration with Axie Infinity is not only a major milestone for Digix — but for the growth of digital gold, highlighting its benefits across a range of industries including gaming. By providing an in-game currency that is backed by gold, a time-tested, safe-haven asset — we are remaining true to our vision of democratising access to gold and further showcasing the innovative use cases for digital gold.”

Starting from 20 July 2020 10 AM EST to 2 August 2020 10 AM EST, Axie Infinity players will have the chance to earn Axie-DGX tokens as they compete in this seasonal event. Axie-DGX tokens will be rewarded as a random in-game drop with a total prize pool of US $1500 Axie-DGX tokens.

Aleksander Leonard Larsen, COO and Co-Founder of Axie Infinity said: “This initiative elevates the play-to-earn narrative to new heights. For the first time, players can earn real gold by simply playing a game. User-focused experiments that benefit and reward users are key to furthering the adoption of blockchain technology.”

As part of this campaign, Bullionix will also craft limited edition 3D collectables in the form of Axie-themed non-fungible tokens (NFTs) that are backed by Digix’s investment-grade gold. Each Bullionix collectable has 0.25 DGX staked on-chain that belongs to the holder of the NFT. A 0.1 DGX minting fee is settled in the same transaction. These commemorative pieces are available to mint exclusively from 20th July until 9th August. Each NFT can then be interacted with in the Bullionix dapp, gifted or even resold on NFT marketplaces. Axie Infinity users are able to access their dashboard to transfer Axie-DGX into their personal wallet with the option to mint these limited edition collectables.

We would love to hear from you!

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Digix partners with Axie Infinity to bring real gold in-game was originally published in Digix Official Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

2020 has been a bumpy ride so far. Investors around the globe are witnessing volatile markets as a result of the changing economic and political developments around the world. From the US-China trade tensions, uncertainty around Britain’s future and the ongoing Covid-19 pandemic — financial markets are seriously impacted and certain countries are already experiencing a recession.

This has pushed investors to look for “recession-proof assets” that are uncorrelated to traditional market movements and economic fluctuations to protect their wealth. With this in mind, two assets have been the talk of the town and have demonstrated its ability to act as a hedge in volatile times — it is none other than gold and bitcoin.

The common belief is to hedge against a volatile market through gold — and this has proven to be a successful method time and time again. However, a new alternative is challenging gold’s position as a safe-haven asset. Since its launch in 2009, bitcoin opened up the gates for a new generation of digital currencies — which boast unique features that could make it a potential safe-haven for investors.

The Goodness of Gold

A safe-haven against market volatility

Historically, gold has maintained its value over time and built its reputation as a “recession-proof” asset class — largely uncorrelated with traditional market movements and economic fluctuations. The first factor that contributes to gold’s safe-haven status is its scarcity — gold has to be dug up from the earth and processed. It cannot be created like the issuance of new shares or printing more cash. In addition to its scarcity, gold is required as a material to make consumer goods such as jewellery or electronics as it is an efficient conductor of electricity.

Gold has hardly any correlation with traditional assets like currencies, and stock indices such as the Dow Jones or S&P 500 — meaning that this precious metal can help investors profit when there is a decline or correction in the stock market. In fact, gold usually performs well during market downturns because even if it doesn’t rise, an asset that remains static while others decline proves to be useful as a hedge. In addition, as more people flee stock markets and put their money in gold, the price will rise accordingly.

Gold has stood the test of time

With the investment demand for gold surging by 80% in the first quarter of 2020, many may see that gold is soaring only because of the COVID-19 outbreak. However, historical data shows that this shiny metal was already performing exceptionally before the pandemic started and has thrived in multiple market crashes over the decades.

In 2019, the price of gold increased by approximately 20% alone and performed exceptionally in times of economic volatility which was a result of last year’s economic and political volatility — from Hong Kong’s political situation, confusion around Britain’s future within the European Union and Brexit, as well as unsettled US-Sino trade ties, and deteriorating relations between Japan and South Korea.

Going back even further, historical data has also shown a similar pattern during the 2008 global financial crisis where gold thrived and outperformed other assets after the initial market turmoil. Gold’s historical ability to shine in tough market conditions have prompted a large number of major hedge funds to place their bets on gold, on expectations that central banks’ unprecedented economic stimulus packages during the coronavirus crisis will prompt devaluations in major currencies.

The ugly truth about gold

High Premiums

The biggest disadvantage of gold is the high premiums associated with transporting, storing and insuring this precious metal. The COVID-19 pandemic has increased the premiums even further as the transportation costs when moving physical gold have surged by approximately 60% due to the worldwide lockdowns, causing the premiums paid for precious metals such as gold to surge — Gold has never been so expensive to own and purchase.

A market that is exclusive for the high-net-worth-individuals

In addition to high premiums, gold has always been a negative-yielding instrument where investors have to pay to store, insure, and secure the asset — Meaning that owning this precious metal is often only in the reach of wealthier individuals, benefitting just a handful of investors.

As investors look to purchase gold to offset declining equities and cash, it is important to understand that obtaining gold traditionally is negative-yielding due to its high premiums. As such, investors are now exploring alternative solutions such as digital gold — which is backed by the stable and enduring value of gold, without the additional premiums associated with traditional gold.

The “new gold” — Bitcoin

Bitcoin halving — Decreased supply, increased demand

Bitcoin is like any other asset, in that it responds to the dynamics of supply and demand. As of last Thursday, about 18.4 million bitcoin were in circulation, meaning there’s only 2.6 million remaining up for grabs. With a lower available supply and a growing demand for the cryptocurrency — Bitcoin is on the path to command a higher price in the upcoming months. This trend was also apparent in the 2012 and 2016 halvings, where the price of bitcoin reached an all-time high within three to six months — as it became abundantly clear that at some point in the near future, new bitcoin issuances will come to a halt.

This halving is occurring at a time when governments are flooding the system with money, which will push more investors to purchase bitcoin to act as a safe-haven against inflation sparked by massive money-printing.

Bitcoin is Defi

Bitcoin is beyond the traditional banking system. It is DeFi — Decentralised Finance. Bitcoin is made up of large networks of computers. There are no central authorities controlling the Bitcoins. Given the nature of bitcoin @blockchain technology, where data is cryptographically secure, it is almost impossible to hack and alter the ledger. This gives the holder a unique ability to hold value and safeguard in his/her wallet in a personal wallet, making it ideal as a tool to store value.

Bitcoin as a blockchain-based cryptocurrency shares some properties with its gold counterpart. In fact, many have called bitcoin “digital gold” in the past due to its weak relationship with all other assets — stocks especially. Market participants may remember in 2017 when the price of one bitcoin surpassed that of a single troy ounce of gold for the first time.1

Things to know before buying Bitcoin

History of volatility

One major concern for investors looking toward bitcoin as a safe haven asset is its volatility. One need look only to the price history of bitcoin in the last two years for evidence. At its highest point, around the beginning of 2018, bitcoin reached a price of about $20,000 per coin. About a year later, the price of one bitcoin hovered around $4,000. It has since recovered a portion of those losses but is nowhere near its all-time high price point. Going beyond the past two years and all the way to the beginning of its creation in 2009 — bitcoin has always had a volatile trading history — from a 10% drop in 2014 as a result of the Heartbleed bug, a 22% price tumble in November 2019 and a recent 55% crash in March 2020.

Unproven value

On top of the overall volatility, bitcoin has historically proven itself to be subject to market whims and news. Particularly as the cryptocurrency boom swept up a number of digital currencies into record-high prices around the end of 2017, news from the digital currency sphere could prompt investors to make quick decisions, sending the price of bitcoin upward or downward quickly.

What you may not know is that Bitcoin was born in part as a reaction to that market panic and volatility of 2008. Investors who saw fiat currencies pumped into the banking system to save it, when those very banks appeared to have caused the crisis, grew frustrated. They sought out ways to insulate their savings from the political class in many ways, from returning to gold in large numbers to the invention of cryptocurrencies.

The valiant goal of Bitcoin was to make a digital asset that mimicked the best attributes of gold without its notable downsides (like the inability to make a piece of pure gold worth a penny or two that’s any larger than dust — a piece of gold the size of a penny fetches a few hundred dollars U.S. these days).

Unfortunately, Bitcoin hasn’t been around quite long enough to know how well it will fulfil its self-anointed role. For instance, we’ve yet to see how it will act during a market crash like 2008. Despite its roots, Bitcoin’s initial rise occurred in tandem with almost all other assets in the world, from the U.S. dollar to global stocks and bonds, rising to historic proportions in one of the longest bull markets of the modern era. Meanwhile, gold prices have dropped by one-third during that time.

With many fundamental legacy market indicators flashing incoming recession, Bitcoin market participants are pushing the “Bitcoin is digital gold” narrative. But the truth is that we don’t know if it really is yet.

“The Bitcoin market has only been around during a bullish economy, so we don’t know how it will perform during an economic downturn.”

In addition to ushering in a new focus on blockchain technology, bitcoin itself has tremendous baseline value as well. Billions of people around the world lack access to banking infrastructure and traditional means of finance like credit. With bitcoin, these individuals can send value across the globe for close to no fee. Bitcoin’s true potential as a means of banking for those without access to traditional banks has perhaps yet to be fully developed.

The new “Hybrid”

Tokenised gold

With the development of Ethereum blockchain technology, gold-back token opens up new opportunities by breathing new life into traditional gold. Unlike traditional gold, digital gold can be used in ways its predecessor cannot while bearing the same attribute as a good store of value.

Combining the best of both gold and blockchain technology — a new form of digital gold was created, also known as tokenised gold. Often seen as the oldest and most reliable “safe-haven” asset, gold has been brought onto the blockchain, allowing investors to enjoy the accessibility, transferability, and convenience of digital assets, as well as the stability of the precious metal.

Tokenised gold is divisible, transferable and spendable. Tokenised gold bestows Its holders the ability to spend or move gold in a borderless manner. The transaction is almost instantaneous and the fee to move gold is a mere fraction of the original fee for transferring gold.

Gold is no longer exclusive to high-net-worth-individuals. Tokenised gold is accessible to anyone with the internet and can be safely kept in an ethereum wallet. You do not have to worry about storage fee, audits and all the other miscellaneous costs associated with owning traditional gold.

Bridging the convenience of digital assets with the stability of the gold market is Digix, the world’s first smart-asset company using blockchain to account for the authentication and provenance of 99.99 percent investment-grade gold bullion. Digix is a pioneer blockchain company with the largest circulating volume of gold-backed tokens approved by the London Bullion Market Association.

Business-blockchains and the advent of regulated digital asset classes represent the next phase in global trade and finance. Blockchain is maturing and regulations are liberalising to the idea of tomorrow’s digital economy. Gold is no exception, it may change in shape and form, but its intrinsic value and recognition will continue to write the next chapter in our shared world history. It is an interesting point in time as we witness more applications of tokenized gold being developed with the advance of blockchain technology.

Disclaimer: This article is written to express my own opinions. It is in no way a piece of investment advice from Digix. Digix’s blog may contain statements and projections that are forward-looking in nature, and therefore, inherently subject to risk, uncertainties and assumptions. You are advised to take into consideration your own unique investment situation, objectives, risk tolerance and investment horizon in any investment decision.

About Digix

Digix, incorporated in Singapore in 2014, is the blockchain company behind the world’s first gold-backed digital asset class. Digix uses blockchain to account for the authentication and provenance of 99.99% investment-grade gold bullions. Physical gold bars are registered on the blockchain, and every 1 gram of physical gold registered is pegged to 1 DGX token. The physical gold bars are kept in vaults located in Singapore and Canada.

Digix recently won the 2020 S&P Global Platts: Precious Metals Industry Leadership Award and was a finalist in the 2016 Singapore MAS Fintech Awards.

Twitter |Facebook |Instagram |Youtube |LinkedIn | Reddit | Telegram | Newsletter | Weibo微博

We would love to hear from you!

At Digix, we appreciate feedback from the community, so do drop us a note at marketing@mailer.digix.global. If you have any question, do check our FAQ on https://digix.zendesk.com/hc/en-us

Gold and Bitcoin are both on the rise. These are what you should know. was originally published in Digix Official Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

It was 7.18 AM, a casual Monday morning to the start of a national holiday in Singapore. I was enjoying my home-made coffee and the tranquility which many of us can never get enough of.

Being human, we have our preferences and how we like our coffee — Some like it bitter, while others don’t. Regardless of personal preferences, there are two important parts to making a cup of coffee; freshly roasted coffee beans, and a good coffee brewer.

I sat at my dining table, slowly sipped my home-brewed morning coffee and reached out to my phone. In a single swift motion, I unlocked my phone and started catching up on my daily news — minutes later, my morning tranquility was gone.

“Donald Trump Could Be About To Lose U.S. Dollar Hegemony To China”

Instinctively I was drawn to the article by this headline — the United States and China. The 2 protagonists from the epicentre of the tariff wars fighting for dominance in currency. This war is about to escalate.

Let’s face it, the economy is on brink of a meltdown due to the coronavirus pandemic and for the Greenback to potentially lose its supremacy at this point is not good news. But then again, as Martin Luther King once suggested — “Every crisis has both its danger and opportunity. Each can spell either salvation or doom”.

Amidst the current volatility in the economy, I have seen renewed interest in gold due to its safe-haven status and Bitcoin as it recently completed another halving. In my mind, 2020 looks like the perfect time to buy gold and bitcoin — Maybe the price of gold will reach $2000 and Bitcoin will find its new support at $20,000. (This is not investment advice)

Now my FOMO kicks in.

Should I buy gold? Will the value of bitcoin surge with halving? Or should I buy both?

Should I buy gold?

I tried to assess the value of gold as how I would assess a cup of coffee. I know gold is a time tested safe-haven because of its innate intrinsic value. It offers a better store of value than fiat currency and governments have been holding gold for 10 consecutive years due to its stable nature.

If gold was coffee, then it is a good coffee bean. How about its “brewing system”? Gold does not offer a good ecosystem. Gold is not portable and divisible in the modern context — simply a white elephant.

That is true until tokenised gold comes along. With the introduction of blockchain technology and implementation of it into the gold industry — blockchain changed the gold ecosystem and introduced the new gold standard.

Tokenised gold allows investors to enjoy the accessibility, transferability, and convenience of digital assets, as well as the stability of the precious metal.

It looks like a pretty good option to me now.

Will the value of bitcoin surge with the recent halving?

I looked at bitcoin from the supply and demand perspective. In the context of bitcoin, there 18.4 million bitcoins in circulation with only 2.6 million remaining out of the 21 million. The demand for cryptocurrency has been growing over the years.

The trend was apparent in the 2012 and 2016 halvings. The price of bitcoin surged within 3 to 6 months as it became more obvious that there will be fewer bitcoins mined. While I know that the volume of bitcoin is limited by a tamper-proof system, I also know that fiat currency is “unlimited” since it can be printed and unprinted.

Governments were flooding the market with fiat currency through quantitative easing before halving took place. This pushed more investors to purchase bitcoin to act as a safe-haven against inflation sparked by massive money-printing from thin air.

It looks like the price of bitcoin will be climbing in the coming months, or will it not? 🤔

While Bitcoin has been referred to as “digital gold” and lauded by many as a way of hedging against downward trending traditional markets, it has experienced its fair share of volatility. From a 10% drop in 2014 as a result of the Heartbleed bug, a 22% price tumble in November 2019 and a recent 55% crash in March 2020.

Looking back, one thing I know for sure, this post bitcoin era in 2020 is different from the past halvings. Never had the economy been in such bad shape when the previous halving took place.

Conclusion

Everyone has different preferences in beverages, hobbies, right down to investing in assets such as gold and bitcoin.

We all have different risk appetites. For me, personally, I am taking a bet on both digital gold and bitcoin. There is no ‘one solution’ for everyone.

My take is to find the asset that suits your portfolio. I would choose the asset like how I choose my coffee. Remember a good cup of coffee depends on the coffee beans and a good brewing system.

Disclaimer: This article is written to express my own opinions. It is not a piece of investment advice from Digix. Digix’s blog may contain statements and projections that are forward-looking in nature, and therefore, inherently subject to risk, uncertainties and assumptions. Do take into consideration your own unique investment situation, objectives, risk tolerance and investment horizon in any investment decision.

About Digix

Digix, incorporated in Singapore in 2014, is the blockchain company behind the world’s first gold-backed digital asset class. Digix uses blockchain to account for the authentication and provenance of 99.99% investment-grade gold bullions. Physical gold bars are registered on the blockchain, and every 1 gram of physical gold registered is pegged to 1 DGX token. The physical gold bars are kept in vaults located in Singapore and Canada.

Digix recently won the 2020 S&P Global Platts: Precious Metals Industry Leadership Award and was a finalist in the 2016 Singapore MAS Fintech Awards.

Twitter |Facebook |Instagram |Youtube |LinkedIn | Reddit | Telegram | Newsletter | Weibo微博

We would love to hear from you!

At Digix, we appreciate feedback from the community, so do drop us a note at marketing@mailer.digix.global. If you have any question, do check our FAQ on https://digix.zendesk.com/hc/en-us

The Value of Gold and Bitcoin From a Coffee Lover was originally published in Digix Official Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

Gold price rises as global recession draw near.

The COVID-19 pandemic has shaken up the global economy and pushed the world into a lockdown against the backdrop of last year’s — China-US trade war, Brexit and geopolitical turmoil. In March 2020, the Federal Reserve cut interest rates to zero and launched a massive quantitative easing program in the face of an imminent global recession — and two weeks ago, the International Monetary Fund (IMF) predicted that the pandemic will cause the economy to face its worst recession since the Great Depression. Amidst today’s deteriorating global economy, investors are looking to commodities — in particular gold, due to its safe-haven status.

Wanting to benefit from gold’s safe-haven status, panicked investors across the globe are flocking to the refuge of this shiny yellow metal, causing gold dealers to suffer shortages as a result of the sudden surge in demand and a diminishing supply in the market. Gold derivatives such as the unallocated OTC gold spot market and COMEX futures market no longer matched the price of physical gold. The spread of traditional gold widened and led to the spike of traditional gold price. Eventually, the price of gold bullions was decoupled from gold derivatives.

Gold continues to be a good store of value and hedge has proved to be efficient

Despite the economic slump caused by COVID-19, the price of gold is continuing to rise. The long-term price stability of this time-tested asset has also proved to be efficient as an investment hedge. World Gold Council compared hedges across different metrics and the performance of hedging investment with gold is better than a diversified hypothetical portfolio.

Investors are buying gold as it is a safe haven asset, a great store of value that defends against inflation. With the quantitative easing program, the Federal Reserve is creating credit out of thin air as what happened during the 2008 financial crisis. This could possibly lead to inflation due to the increase in money supply. Coupled with zero interest rates, there will be increased debt and eventually an increased government deficit.

Central banks’ appetite for gold provides a stable base

Central bank gold reserves are rising over the years. Their global reserves had grown by 650.3 tonnes, the second-highest annual total for 50 years. With central banks as the net buyers for the 10th consecutive year, gold is expected to provide a stable base for the gold market in the long term as central banks hold on to more gold.

Unlocking the booming gold industry on Blockchain

With the current state of the economy, one major issue of buying physical gold becomes apparent as gold dealers are unable to move gold across borders. Deliveries have to come to a complete halt and bullions are closed as gold doesn’t come under essential items. This issue can be solved by placing gold on the digital realm with blockchain technology.

Digital gold is highly portable. Anyone with an internet connection can trade gold online without the inconvenience associated with storage and portability. Blockchain enables digital gold to be transferred across international borders.

Digital gold offers investors greater utility and liquidity allowing anyone to trade, spend, hold, and micro-invest their savings into the world’s most time-tested asset class. This opens up an opportunity for as an investor to trade in the gold markets no matter where you are.

Digitalising gold on the blockchain provides investors a stable currency, one that fiat currency cannot offer. It is a stable currency through a safe haven asset. A stable digital currency that is pegged to gold offers the most suitable way to hedge investment in a time of a recession. It is apparent that investing in digital gold is necessary at this point.

Holding gold-backed token in times of economic volatility

The blockchain technology provides a trustworthy way to record transactions and ownership of gold. It is the new gold standard.

Digital gold is more mobile than physical bullion. Digix’s DGX can be transferred across international borders as easily as sending an online payment or a bank transfer — opening up gold markets to globalisation through the power of DeFi ​and simplifying the process of using gold holdings to pay for goods and services. Using gold as an alternative to fiat has never been so easy.

DGX acts as a bridge between the real world and the digital realm by bringing a safe haven store of value onto the blockchain. As gold has a value that is readily understood and accepted by all cultures and demographics, barriers to entry to the retail gold market are reduced for the average person, who is now able to hold gold-backed tokens indivisible form. There are a plethora of use cases for both individuals and institutions: Portfolio diversification, wealth preservation, payments, collateralization for lending and other financial products, and more.

In time to come, digital gold might be instrumental in bridging the old financial system and the new digital system, with its utility unlocked for secure payments and all other creative uses such as Bullionix.

What makes DGX special?

DGX is built on Ethereum and its proof of provenance protocol on the Ethereum blockchain ensures all gold tokens issued are 1:1 with the underlying physical precious metal. All movements of gold bars from procurement to the storage, issuance of DGX, and any associating documentation are uploaded onto IPFS and timestamped on the Ethereum blockchain to guarantee its immutability. All information is available 24/7 to the public and tamper-proof with blockchain technology.

Digix is backed by trust — working exclusively with industry-leading partners and is in compliance with Singapore requirements, one of the world’s most respected regulators. The transparency, security, and traceability of blockchain ensure that DGX tokens can be transacted and transferred with full visibility and audibility.

Digix believes that the value of gold should be accessible to everyone. By bringing the value of gold into the digital realm, and leveraging the power of decentralised finance, Digix presents consumers and investors with​ an easy-to-use,​ better money that is fit for a digital age.

*Performance between March 2000 and March 2020. The hypothetical portfolio is based on Willis Towers Watson Global Pension Assets Study 2019 and Global Alternatives Survey 201. Performance is based on blended weights of the hedges ranging from 2.5% to 10% of the portfolio, proportionately reducing the rest of the portfolio by the initial weights. ‘Returns’: average of cumulative and average returns; ‘Volatility’: overall portfolio volatility; ‘Risk-adjusted returns’: average of the return on risk, Sharpe ratio and information ratio; ‘Max drawdown’: the most the portfolio lost during any trough. See the Appendix and footnote 4 for definitions of ‘VIX short-term futures’ ‘CDS IG’, ‘CDS HY’; and ‘TIPS’.

Source: Bloomberg, World Gold Council

We would love to hear from you!

At Digix, we appreciate feedback from the community, so do drop us a note at marketing@mailer.digix.global or join our channels below:

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Riding Through the Global Economic ‘Storm’ with Digital Gold was originally published in Digix Official Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.