Bitcoin - Forex Combo Strategy: The Gold-Backed Token
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Bitcoin - Forex Combo Strategy: The Gold-Backed Token
Welcome back everyone to this week’s edition of my Bitcoin - Forex Combo Strategy. What about that Bitcoin plunge earlier today? I know it caught may by surprise, but the SEC’s refusal to grant approval to the Bitwise ETF may have had something to do with it together with profit taking as a price gap which was created in June was closed. Prior to the sell-off, Bitcoin was moving into my previous support area between $8,870 - $9,927. While he have stabilized from the hashrate flash crash, something still feels a bit off with price action and we may attempt another breakdown into my next support area between $6,380 - $6,550.
The Perth Mint Gold Token (PMGT)
The Perth Mint is Australia’s largest precious metal refinery and it entered into a partnership with InfiniGold which is a fin-tech start-up focused on digitizing precious metal. Their partnership resulted in the first gold-backed digital token called Perth Mint Gold Token or PMGT. It is an ERC-20 token which is pegged 1:1 to GoldPass Certificates. These certificates are issued by the Perth Mint and are 100% backed by Perth Mint gold stored with central banks.
This essentially created the first government-backed token, but not through direct participation. GoldPass allows investors to transact in physical gold through digital certificates. Gold is the most popular safe-haven assets and as the global economy is sliding towards a recession, prices have soared. Demand is on the rise and the PMGT token will make it more accessible as it is listed on a public blockchain. Die-hard cryptocurrency enthusiast may dislike the “government” part of this coin, but it is limited to gold storage only.
Gold Goes Mainstream Through Digitization
A press released in regards to PMGT read “The real-time liquidity of PMGT is provided by market makers and enabled via The Perth Mint GoldPass platform where users can sell back to The Perth Mint, or take delivery of their holdings by exchanging their GoldPass certificates for a range of the Mint’s gold products, including LBMA London Good Delivery (LGD) bars. Subject to final regulatory consultation, this will make PMGT directly tradable against traditional gold products, including gold ETFs, CME gold futures, and physical XAU.”
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Gold-backed Products in Demand
Paxos, the stablecoin operator, already launched PAX Gold or PAXG on the Ethereum blockchain and claimed it is the "the first crypto-asset redeemable for physical gold”. According to Paxos, each token is backed by one fine troy ounce of London Good Delivery gold which is stored in vaults across London. Charles Cascarilla, Paxos CEO and Co-Founder, added “In a digital and global financial system, owning physical gold is a cumbersome, outdated investment; it's not easy to trade, divide, move or leverage against other investments.”
Cascarilla further added that “Gold purchased through unaccredited retail outlets is not only expensive, but also risky as the quality and provenance of the gold are unverified.” Adding credibility to PAX Gold was the approval of it by the New York State Department of Financial Services (NYDFS) who labeled it the “first gold-backed virtual currency in New York state.” More commodities are likely to be digitized moving forward as demand grows rapidly for these products.
B2C2, a crypto liquidity provider, launched its own gold derivative product which allows traders to settle derivative contracts in Bitcoin which are backed by physical gold held in vaults. Max Boonen, Founded and CEO of B2C2, stated “The current macro environment, dominated by uncertainty over economic growth and inflation, is prompting central banks to rethink monetary policy and market participants to reassess the likely path of interest rates. Conflicting narratives abound, fueling market activity, and we expect demand to only grow for ways to gain and manage exposure to deflationary assets such as gold and Bitcoin.”
Bitcoin - Forex Combo Portfolio Updates
I keep monitoring price action in Bitcoin as I plan to add to my position, but I think we could see one final push lower. I currently hodl 500 Bitcoins which carry an average entry price of $8,500. I also have 60,000,000 Ripple which carry an average entry price of $0.3015 and 40,000 Litecoin with an average entry price of $66.00. The three charts below show my Bitcoin, Ripple and Litecoin holdings.
I stayed clear of new forex trades this week as I wanted the US-China trade negotiations to pass and I was looking for more Brexit clarity. Sometimes it is good to take a breather and as you don’t always have to be in the market. Many traders feel forced to trade, but I let my portfolio ride when key events like this week are playing out. I am glad I did as we did get more clarity on both and I will look to add trades to my forex portfolio again from Monday moving forward.
Here is the summary of my Bitcoin - Forex Combo portfolio: I hodl 500 Bitcoins worth $4,134,580, 60,000,000 Ripple worth $15,930,000 and 40,000 Litecoin worth $2,224,800 plus a total cash portfolio worth $7,269,178. I currently have no open forex positions in my portfolio. My total Bitcoin - Forex Combo portfolio is worth $29,558,558, up $1,222,180 from last week’s value of $28,336,378 and at a fresh all-time high. Are you ready to grow your account? Take your first step now, open your own PaxForex Trading Account today and follow my Bitcoin - Forex Combo Strategy! Comment below with any questions you may have and I will be happy to help you get started!
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