Is Digital Gold a Good Investment? A Guide to Investing in Cryptocurrency

 Is Digital Gold a Good Investment? A Guide to Investing in Cryptocurrency

Is Digital Gold a Good Investment? A Guide to Investing in Cryptocurrency In the last year, gold prices have gained around +28.2% in India. Hence, if the buyer is not looking out for any ornament, buy digital gold will be a better investment option than jewelry, with any range or amount of investment.

Cryptocurrency

Impact on Gold Investment Arun Thukral, MD and CEO of Axis Securities, leading market research and brokerage firm shares, "With the RBI’s ruling earlier this month, the demand for gold jewelry will witness downward pressure, in line with the government’s efforts to make India a less-cash economy. However, the rising popularity of digital currencies will soften the blow for gold, since it does not require storage of physical gold. Given the move by the Modi government to monetize gold by demonetizing high-value currency notes, we expect further interest in gold in India. However, we have factored in muted gold prices with minimal import volume, in line with the government’s efforts to curb imports, to curb the current account deficit (CAD).

Gold

In the last year, gold prices have gained around +28.2% in India. Hence, if the buyer is not looking out for any ornament, digital gold will be a better investment option than jewelry, with any range or amount of investment.

What is Digital Gold?

Digital gold is the name given to an investment in digital cryptocurrency. It is a cryptocurrency that exists primarily online and digitally. Its investments are made through the exchange of digital coins for dollars or the equivalent. Digital gold is referred to as a cryptocurrency, in some cases. These cryptocurrency transactions are executed through a peer-to-peer network or blockchain. What are the main advantages of Digital Gold? Most importantly, there are no storage issues because digital gold coins are stored on the blockchain and can be backed up with any legal documents. Users of digital gold coins can transfer their funds from one wallet to another at any time.

Is it a Good Investment?

Is Digital Gold a good investment option? Let's examine. First of all, should an investor be investing in Cryptocurrency gold? On one hand, Cryptocurrency gold is extremely attractive because it is free from human interference and does not carry a human name associated with it. Secondly, cryptocurrency gold comes without a fixed price which is highly volatile which makes it impossible to invest in an ordinary brokerage account. Thirdly, while gold is the most powerful physical commodity, and we know it is quite solid, there are few misconceptions about it because people generally think that it is a boring investment as well. Hence, it is not an easy decision to decide whether to buy cryptocurrency gold or not.

Where to Invest in Cryptocurrency

However, digital gold would be an inferior investment option for savers looking for long-term investment. Unlike physical gold, cryptocurrency is the least liquid asset class. A coin can hold as much as 1 or 0.1% to 0.09% of all the cryptocurrency in circulation. Also, the supply of cryptocurrency tends to be fixed in supply, unlike gold which is re-monetized or adjusted to fit the demand. In short, Bitcoin is available to buy in 1,275 Bitcoin ATMs in 141 countries. Hence, investors looking for a liquid and safe store of value should avoid purchasing cryptocurrency. There are times when buying physical gold or other precious metals may be a better option for an investor. On the other hand, as the value of cryptocurrency grows, physical gold and precious metal prices fall.

Conclusion

Digital gold is the latest gold investment trend that is all set to break through in the Indian market in the coming years. However, the market should be careful with such a new trend as it is yet to get over the concern of legality and security. Digital gold is a financial instrument that is a safe and secure form of investment, where the digital currency can be purchased using a digital wallet or any other device that has an internet connection. In India, this new market will give a major boost to e-wallets, or even the banked world, by increasing investment possibilities in digital gold, thereby creating a transparent financial market. Hence, in this market, gold traders should definitely stay abreast with all the regulations, so as to ensure that they don’t fall foul of the law.

DK Digital

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