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The financial industry has been fraught with concerns since the end of 2022 and the beginning of 2023, as investors grapple with inflation, bank runs, bank failures, and collapsing exchanges. The fear of assets being commingled on balance sheets has made many investors wary of depositing their cash into centralized entities. Fortunately, those affected by recent bank runs were covered by FDIC insurance and received their assets back. However, individuals with assets in non-FDIC-insured centralized exchanges, like FTX, were not as lucky.
The high inflation rates have led to increased economic uncertainty, with the Federal Reserve facing scrutiny for raising interest rates and printing more money.
As a result, certain investors have turned to commodities like gold and silver, considering them safe haven assets.
There are several reasons why investors view gold as a safe haven asset:
Gold as a Hedge Against Inflation:
In light of gold's ability to act as a hedge against inflation, many investors are turning to this precious metal. Historically, gold's value rises during periods of high inflation, which we are currently experiencing.
Given the economic uncertainty in recent years, many investors are purchasing gold. Unlike fiat currency, the amount of gold is finite which makes it an attractive store of value. These factors help investors preserve their wealth and spending power.
Gold as a Hedge Against the Stock Market:
Traditionally, gold has served as a hedge against the stock market as it is a physical asset not directly tied to any specific currency or country. During times of economic uncertainty and market volatility, investors may become more risk-averse, seeking assets like gold that have historically shown a lower correlation to financial assets such as stocks and bonds.
Challenges of Buying Physical Gold
While buying physical gold may seem appealing, it comes with its own set of challenges:
- Gold is a valuable commodity that can attract thieves or unwanted attention. Many investors rely on bank vaults or facilities for secure storage, but these options can be expensive and impractical.
- Transportation can be a significant challenge when it comes to holding gold. Gold is a dense and heavy metal, which can make it difficult and expensive to transport. If you need to move gold from one location to another, you will likely need to use specialized and expensive transportation services that can securely transport the gold without damage or theft.
- While gold is a highly valuable asset, it can be difficult to liquidate quickly. Finding a buyer for gold can be a time-consuming process, and the price received for selling gold can vary based on market conditions.
Buying Gold Using Blockchain Technology
Blockchain technology offers a solution for those concerned about the tangible aspects of physical gold ownership. Purchasing gold on the blockchain provides transparency, as anyone can view transactions and verify legitimate ownership. Blockchain technology also ensures security through cryptography and cryptographic signatures when creating new transactions. Furthermore, digital purchases and sales of gold may reduce the challenges associated with holding and securing physical gold.
iTrustCapital offers a seamless way to buy and sell physical gold using blockchain technology. By leveraging VaultChain™, clients can invest in investment-grade gold and silver held physically at the Royal Canadian Mint, with ownership managed via a secure blockchain distributed ledger. Clients can buy and sell gold 24/7 from their personal dashboard, without commission fees or overpriced coins.
iTrustCapital's platform enables easy liquidation of gold, removing the stress of finding a buyer for the precious metal. Moreover, assets are held off balance sheet and never commingled with iTrustCapital's business operations. To learn more and get started on your investment journey, sign up today!
This article is for information purposes only. It does not constitute investment advice in any way. It does not constitute an offer to sell or a solicitation of an offer to buy or sell any cryptocurrency or security or to participate in any investment strategy.
iTrustCapital is a cryptocurrency IRA software platform. It is not an exchange, funding portal, custodian, trust company, licensed broker, dealer, broker-dealer, investment advisor, investment manager, or adviser in the United States or elsewhere. iTrustCapital is not affiliated with and does not endorse any particular cryptocurrency, precious metal, or investment strategy.
Cryptocurrencies are a speculative investment with risk of loss. Precious metals are a speculative investment with risk of loss. Cryptocurrency is not legal tender backed by the United States government, nor is it subject to Federal Deposit Insurance Corporation (“FDIC”) insurance or protections. Clients do not receive a choice of custody partner. The self-directed purchase and sale of cryptocurrency through a cryptocurrency IRA have not been endorsed by the IRS or any regulatory agency. Historical performance is no guarantee of future results.
Some taxes and conditions may apply depending on the type of IRA account. Investors assume the risk of all purchase and sale decisions. iTrustCapital makes no guarantee or representation regarding investors’ ability to profit from any transaction or the tax implications of any transaction. iTrustCapital does not provide legal, investment or tax advice. Consult a qualified legal, investment, or tax professional.
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