The crypto world is seeing a huge influx of gold-backed stable currencies, and now Tether is adding a new one to the mix.
Tether Is Getting Involved in Gold
The world could see the new “Tether Gold” cryptocurrency by the time Christmas rolls around this year. What is it about Christmas that seems to bring either great renown or floor-scraping gutter waves to the crypto space?
Remember in 2017 during the holiday season when the number one cryptocurrency by market cap (we’re talking about bitcoin) reached its all-time high of nearly $20,000? Those memories are less fresh than ones of bitcoin during Christmas the following year, when it was trading for a measly $3,500.
Either way, Paolo Ardoino – the chief technology officer for Bitfinex and Tether – is very excited about the prospects Tether Gold can bring to the digital money space. He comments:
Current macro-finance uncertainty brings the need of traditional instruments to hedge risk of our customers, especially in the crypto industry. Gold has been, historically, an important asset for risk contingency.
Tether’s new product emerges at a time when many other crypto-based platforms seem to be getting the same idea. For example, Live Bitcoin News recently reported on Coin Shares – a company that dabbles in stable currencies – and its plans for a new gold-backed stable coin.
Danny Masters – chairman of the London-based company – explained in a statement:
Gold tokens are appealing due to a confluence of events: weakening real interest rates and weakening national currencies combined with increasing regulatory clarity around non-security tokens and the natural appeal of gold to investors.
Bitcoin itself has often been compared with gold and is affectionately referred to as “digital gold” by several members of the cryptocurrency community including David Marcus, the head of Facebook’s blockchain division and the main developer behind Libra.
Comparisons are made in that bitcoin and gold often work to downplay some of the economic tension that can affect commodities or national forms of fiat currencies. Economic strife isn’t enough to make their values go down; thus, both products can be great when it comes to maintaining one’s wealth.
At press time, there are roughly 20 different gold-backed tokens currently existing within the cryptocurrency space. Another example is Paxos Gold, introduced by Paxos last September. The company is a regulated financial institution that seeks to create a “global, frictionless economy” according to its website.
We Need Better Products
Bitfinex could allegedly be in the market for new products, which explains the development of the new token. It is reported that the platform’s trading volume on several coins has been down by more than ten percent since June. Nic Carter – co-founder of Coin Metrics – says:
This could be a function of Binance’s launch of futures… or just wariness of regulators and their ongoing back and forth with the exchange.