4 Asset-Backed Cryptos to look out for in 2021
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Cryptocurrencies backed by assets have proven to be popular in 2020. Uncertainty due to the coronavirus has caused investors to flock towards ways to protect against market volatility.
In a virtual currency world dominated by rapidly-changing prices, stablecoins have drawn attention due to their design to minimize price fluctuations as much as possible. While the bulk of stablecoins in existence are fiat-backed, cryptocurrencies backed by assets are growing in number.
Some asset-backed cryptocurrencies are based on a basket of cryptocurrencies, which is usually over-collateralized to account for the volatility of digital currency.
Others are backed by precious metals like silver or gold.
Popular asset-backed cryptos include SilverCoin, Pax Coin, and Tether Gold.
As fall 2020 emerges, investors are starting to think about the future of the cryptocurrency market and how they can leverage portfolios for the next year.
Many are curious about what asset-backed cryptocurrencies they should be investing in to stabilize their investment strategy as they wait for how the market will respond in 2021.
Hopes are a potential coronavirus vaccine, or at least the loosening of travel restrictions and business shutdowns can revitalize the economy and spur investor optimism in both traditional and virtual currency markets.
Here is a list of four asset-backed cryptocurrencies to look out for in 2021. These options have strong potential across the next year and are worthy options for prospective investors to research and consider.
Pax Gold (PAXG)
Started by PAXOS, Pax Gold is one of the most well-known gold-backed cryptocurrencies on the market. Every digital PAXG is backed by a troy ounce of gold audited on a monthly basis. Holders can research the serial number of gold bars coins are backed by on the Pax website.
PAXOS’ reputation in the world of asset-backed cryptocurrencies makes the coin a strong choice for investors interested in stablecoins.
With a market capitalization in the tens of millions of dollars, PAXG is a legitimate way for investors to purchase gold digitally and redeem for physical bullion. PAXG was also the first gold-backed coin approved by the New York State Department of Financial Services.
The Liechtenstein asset management company has created an interesting concept for tokenizing silver bullion. The Lode Coin is designed for investors to stake holdings of silver bullion in exchange for digital coins.
Lode Coin owners will then receive profits from the issuance of the associated AGX Coin. Each AGX Coin is backed by a gram of silver that can be used to buy physical silver and gold from dealers affiliated with LODE. As the ecosystem of AGX Coins grows, digital coins will flow to the owners of Lode Coin. The interesting concept behind LODE that rewards large and small investors makes AGX Coin (and Lode Coin) worthy of watching in 2021.
SilverCoin represents the first fractionalized silver-backed asset that is directly able to be purchased in fiat or other cryptocurrencies. Fractionalized access to silver democratizes bullion investment and allows for large and small buyers to be able to invest in the cryptocurrency world while maintaining the ability to cash out digital investments for physical bullion.
Each SilverCoin is backed by 1/100th of an ounce of 99.9% pure silver secured in a vault and fully audited. The inclusive nature of SilverCoin and its affordability as a fractionalized asset gives the cryptocurrency strong prospects in 2021.
Certified Diamond Coin
Instead of gold or silver, the creators of Certified Diamond Coin have turned to physical diamonds to back their cryptocurrency. CDC Coin is backed by 0.05 carats of diamonds and is designed to function as a medium of exchange.
The DPASS token represents an individual diamond and is based on the ERX-721 standard. Finally, the issued DPT token offers holders access to services inside the Certified Diamond Coin platform. The project’s creators say 95% of assets are stored in investment-grade diamonds.
Certified Diamond Coin’s work to get around the non-commoditized or fungible nature of diamonds and still allow investors to ‘claim’ assets is a unique proposition.
Watch Out For Asset-Backed Cryptocurrencies In 2021
Asset-backed cryptocurrencies have had a colorful history. A few years ago. the industry was rocked when Tether announced more than $31 million was removed “through malicious action by an external attacker.”
2020 has brought heightened optimism for cryptocurrencies backed by assets as investors remain interested in their stability. Cryptocurrencies backed by precious metals and other commodities look to be only growing in popularity.
The above four coins should be watched by prospective investors next year due to their growth potential.