Australia’s biggest gold refinery is set to make a new cryptocurrency backed by gold after the Chief Executive reportedly planned to expand investment in the nation’s metals.
Perth Mint, which is an Australia’s official bullion mint and wholly owned by the Government of Western Australia, said they are planning to capitalize on the rise of the exchanging of digital money as an approach to enable the surge and enthusiasm for investing in Australia.
This plan was established as various cryptocurrencies have soared in popularity in the course of the last 12 months with Bitcoin, Ripple, Litecoin, and Ethereum each seeing a sky-rocking boom. They are adamant on the fact that Bitcoin correlates with ransomware attack.
Richard Hayes, Chief Executive of Perth Mint said that, as the world travels through circumstances of increasing uncertainty, you will see individuals in search of alternative aids or means of making money. He continued by stating that, “we are currently seeing this huge stream of assets into the likes of Bitcoin right now since individuals are searching for something outside of the conventional investment.”
He also added that the proposed online digital currency will “bring investors back to valuable metals after a boom in alternative investments such as cryptocurrencies.”
Actually, Bitcoin was the first virtual currency and since it was initially mined in 2009, it has seen its esteem flow and achieve a record-breaking high of more than $17,000 (£12,000) in December 2017. However, the value of bitcoin has dived from that point forward and a week ago observed its esteem drop to just $11761.35 (£8,300).
Mr. Hayes contended the choice of the mint to build up a gold-backed currency, similar to how physical monetary standards have already been linked in the past, such that, it will assist convey a projecting value stability to those investing into the digital money. He again asserted that his plan will mean individuals could trust that the digital currency will be really justified regardless of a physical sum.
However, he stated explicitly that, “With a crypto-gold or a crypto-valuable metals offering, what you will see is that gold is actually backing it. Therefore, it will have all of the advantages of something that is on a distributed ledger that settles very, very, quickly, that is easy to exchange, yet is really backed by valuable metals, thus there is something actually behind it, something sturdily backing it.”
The Perth Mint is not the first company or organisation to declare their intentions of making a currency connected to gold. A year ago a cryptocurrency called Onegram which uses blockchain technology to create a new kind of cryptocurrency, where each coin is backed by one gram of gold at launch, was declared by finance firm Shariah-compliant, leading to notable media attention.
However, sales of the digital money Onegram collapsed, with less than 0.14 percent of the company’s target being sold in the principal period of the initial coin market. Nevertheless, Venezuela has also declared plans to launch a digital currency, called the Petro, which will be backed by gold.
The relationship between Cryptocurrency and Gold
Some call cryptocurrency specifically Bitcoin, ‘digital gold’ since it remains as the cryptocurrency with the most astounding value as we saw its tremendous rise in 2017, however strangely digital currency and gold do not appear to have comparative market conduct.
The relationship between the two has been on the best of attention for industry spectators for a long time, as the media has much of the time championed the prospect that bitcoin is new ‘secured’ asset. Bitcoin gold has been said to help bitcoin price to soar.
However, while some market spectators have guaranteed there is a relationship amongst bitcoin and gold, individuals from the digital currency trade group oppose this idea.
In spite of the fact that bitcoin and gold have regularly demonstrated an outstanding connection during times of macroeconomic crisis, this relationship has frequently separated once market situations come back to its ordinary state.
Nevertheless, some have gathered information they trust demonstrates this relationship is a hypothetical, best case scenario.
Peter Zivkovkski Comments on the Relationship
Petar Zivkovkski, director of operations for bitcoin exchange platform Whaleclub, expressed that, his firm still can’t seem to identify any “significant statistical relationship” amongst bitcoin and gold. He likewise stated, “Accomplishing critical understanding into the relationship amongst bitcoin and gold requires investigating market relationship.
At the point when the general market correlation is high, so is the relationship between this two, when the general market correlation is low, so is the relationship between them also.” Statements like these could diminish the expectations of numerous market contributors who need the two assets to correlate reliably.
While the value developments of bitcoin and gold are available to translation, having more knowledge into the important market information can enable readers to grow an extra updated point of view.
An examination of historical market information carried out failed to represent a solid relationship between cryptocurrency and gold. On a week by week premise, the moving relationship between bitcoin and gold’s profits was sure for about the whole time frame between 30th December 2011, and 20th June 2014.
When clarifying the low relationship amongst bitcoin and gold market specialists indicated both the varying market size and market flow of the two assets.
The bitcoin market can be characterized as “little” in contrast to the gold market, featuring that “the request expected to drive gold prices” is significantly more prominent than expected to boost bitcoin.
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