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Darrin Woo: Gold-backed Stablecoin a very good option




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Crypto Heroes Gold Backed Stablecoin Good Option

According to Darrin Woo, the director of Woo Hon Fai Group, investing in gold-backed stablecoin is one of the smartest investment moves at the moment.

Invest in stablecoins despite the current market situation

Darrin Woo during an interview with Bloomberg was asked about where to invest USD 1 million. He replied that investing in gold-backed stablecoins would bring profit at the moment. Investing in a gold-backed stablecoin would give the cryptocurrency world the needed exposure at a time when the prices are down, he suggested.

Woo stated that “Because of my family background—my grandfather founded Lee Cheong Gold Dealers in Hong Kong in 1950—I believe in the physicality of gold. I would buy a million dollars’ worth of bullion bars and stuff them under my mattress. Gold has underperformed the S&P 500 index for the past five years…In the next 10 years, gold is one of the best contrarian plays. I say buy when no one else does.”

The crypto market expert further talked about the rise of cryptocurrencies entering the space of gold. He spoke of G-Coin, which is a stablecoin that is backed by the price of gold. However, the stablecoin is affected by the volatility in the gold marketplace. Similarly, they would benefit from any appreciation that comes from the rise of gold, a feature that seems to be missing in the fiat currency stablecoin markets.

He further stated that “If you talk to millennials, they aren’t interested in buying stocks and don’t even have brokerage accounts, and they can’t afford real estate. So they are looking for a store of value that’s also convenient. They are interested in new technology and blockchain and using a digital wallet.”

The volatility of cryptocurrencies deterring investors

Even though the cryptocurrency market holds a lot of potentials, it is still struggling to gain widespread adoption. According to Woo, the high volatility of Bitcoin and other cryptocurrencies is one of the main reasons why investors are not trooping into the industry.

He told Bloomberg that gold-backing in the form of stablecoin will provide investors with the needed protection against the crash in crypto prices. He stated that “Unlike Bitcoin and Ether, whose prices trade wildly, gold-backed tokens have an intrinsic value and should be a lot less volatile…G-Coin [is] backed by gold produced in accordance with World Gold Council and Responsible Jewellery Council standards. The resulting gold can be tracked from mine to vault using blockchain.”

Tether no longer the primary stablecoin

Tether’s USD was the primary stablecoin available on most cryptocurrency exchanges over the past few months. However, things have changed recently as investors no longer trust that the stablecoin is backed 1:1 to the USD.

Despite the market cap of Tether now close to USD 2 billion, new stablecoins such as Paxos and coming in and becoming the preferred choice for investors and traders.

With the bear market still in play, it is no surprise that investors and traders now prefer to invest in stablecoins. The status quo might continue until industry giants like Bitcoin and Ethereum can provide the long-term viability and stability that some investors look for.

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