When looking to trade stablecoins – specifically gold-backed cryptocurrencies – it’s important to understand the best place to do so. While there aren’t any exchanges dedicated entirely to stablecoins, there are assets whose teams host their own platforms.
In this guide, we’ll go over if you should use a dedicated platform for trading gold-backed currencies, like Goldexchange.com.
The pros and cons of a traditional exchange
If you’re trading on a traditional exchange, you must note that while these platforms may support many stablecoins, it’s not necessarily the safest place to do so.
Keep in mind that these platforms also support traditional cryptocurrencies like Bitcoin and Litecoin. Big traders might involve themselves on exchanges like Binance and Coinbase. This makes the platforms a massive target for hackers and other threats – especially if users leave their assets in the online wallet.
That said, these platforms generally have top-of-the-line encryption methods in place. This security protects assets to a reasonable degree, but it isn’t perfect. Generally, these exchanges also have mobile and desktop apps which make them quite accessible. If you’re more of a peer-to-peer trader, these platforms also have that.
So, if you’re looking to trade a gold-backed cryptocurrency on, say, Coinbase, be aware of the associated risks. Your online wallet might be at risk. Don’t hold your assets online.
The pros and cons of a dedicated platform
A dedicated platform generally only has that one stablecoin for purchase. While there aren’t other assets for sale, this means you can focus on one asset.
If a cryptocurrency has a dedicated platform, you can be relatively sure they’ve set up the proper security measures to protect it. That, and these exchanges usually don’t have to apply know-your-customer (KYC) or anti-money-laundering (AML) policies. This means you can trade anonymously if you’d prefer, protecting your privacy. Traditional exchanges require users to reveal their identity. This goes against privacy, one of the core values of crypto.
That and all of the exchange’s features are sure to be associated with that stablecoin. You can enjoy stop orders, buy limits, and maybe even futures depending on the platform. On a traditional exchange, these extra features might be limited to top coins only. While that’s not the case with all of them, you’re still better off on a dedicated platform.
Why trade gold-backed cryptocurrency?
Gold-backed cryptocurrency is a popular commodity for those looking to get into precious metals investments. For one, these cryptocurrencies can be purchased in minutes. Buying physical gold requires licenses, time, and charges extra fees.
Stablecoins are cheaper than traditional gold as well, and you can buy them in fractional amounts. Physical gold is limited to bars, coins, and other forms. Gold-backed cryptocurrency also circumvents the need for physical storage. Other types of gold investment require buying a safe or using a safety deposit box for security. These assets cannot be left unguarded.
With the digital form of currency, you can rest assured – the company has it covered. Considering these crypto coins must be backed by the physical asset, a proper platform will have top-of-the-line storage already.
However, it’s worth noting that these assets are still worth the same amount as the physical equivalent. Just because you’re buying cryptocurrency, you’re not going to suddenly profit off of volatility or anything of the sort. If gold’s price goes up, then you’ll see an increase. If it drops, your stablecoin investment will also drop. These platforms are more for convenience’s sake than anything else. This makes them a fantastic place to start for interested investors.
That convenience does make for increased accessibility, as well. With the advent of gold-backed cryptocurrency, precious metals are bound to see more investments than ever before.
Now that you’re aware of gold-backed cryptocurrency and where to trade it, be sure to do your research on the best platform. While dedicated platforms are the way to go, you’ll still have to vet your choices and pick one that actually satisfies your needs.