Out of all the precious metals, palladium is by far one of the most fascinating. Not being officially listed as an element until 1751, this radiant silvery-white metal did not become commonplace until the 1970s. Fast forward to the present-day, and palladium has become a prized metal for an array of bullion collectors thanks to its rarity and high cost of mining.
Palladium is a key ingredient in the electronics industry, and it is frequently incorporated into a wide variety of new technologies like fuel cells. As a commodity, it has piqued the interest of many investors due to it not being easy to substitute for other metals. While not necessarily reaching the same heights as gold and silver in terms of popularity, its status is still admirable given how generally overlooked it is.
For many, the best way to invest in palladium is through cryptocurrency, or more specifically, stablecoins. Investors who are interested in benefitting from palladium’s value have the option of investing in a stablecoin called Palladium Coin, which is backed by bullion reserves of the metal.
The intrigue of stablecoins
For all that Bitcoin is praised for, there is one drawback that is largely agreed to be a detriment to the cryptocurrency: volatility. Some do not like the unpredictability, but when it comes to one’s finances, many people find predictability to be safer. This preference is why Bitcoin’s volatile nature frightens some investors. They commonly experience insufferably high price volatility, which in turn greatly affects the amount they invested in.
A stablecoin’s primary purpose is to handle this volatility by way of tracking the issues of comparatively more stable assets like traditional currencies. These assets are designed so that they have low volatility when it comes to price.
Two of the major advantages of stablecoins are seen by many to be price stability and low volatility. It is important to note that the stability of stablecoins relies heavily on the asset that they are pegged to. By their very nature, stablecoins are tied to assets that are expected to be stable, but that is not to say that they are not resistant to volatility.
Price swings can still occur and have great effects on the stable coin’s volatility. While this sounds alarming, take comfort in the fact that it is rare. Stable coins are quite stable, and this is courtesy of the high stability of the asset that they are backed by.
Precious metal-backed stablecoins
Palladium Coin is a stablecoin to keep an eye on this year. It is a fractionalized asset that anyone can purchase with other cryptocurrencies or conventional money. The cryptocurrency’s fractional nature means that any amount is purchasable at any time, which in and of itself presents a large advantage for potential investors in palladium. With a high spot price per ounce of the metal, even a single bullion gram could be too expensive for certain future investors.
Of course, palladium is not the only precious metal that backs a stablecoin. There is also silver, platinum, and gold, which is probably the biggest name in valuable metals, having been an important asset for many years.
There are various gold-backed stablecoins on the market, including Perth Mint Gold Token (PGMT), which is one of the most popular stablecoins. PGMT tokens are backed by gold that derives from the Perth Mint and is under the management of the Australian government. The Mint provides users with a GoldPass app that produces a certification containing all the distributed gold bullion. PGMT holders can use this app as a way to confirm that the gold reserve backs their digital assets.
Another well-known gold-backed stablecoin is PAX Gold (PAXG). PAXG coins receive backing from a single ounce of a London Good Delivery Bar. Much like PGMT, PAXG coins are considered to be highly legitimate in the industry of precious metal-backed crypto. This is mostly because of their connection with the government in some way.
An ideal investment?
A crypto-oriented monetary system once seemed like an impractical decision, especially since cryptocurrencies are a volatile asset class. However, stablecoins pegged to tangible assets have gone on to be worthwhile options for anyone interested in precious metal investments. As an added perk, there is no need to deal with storage or transportation.
With that said, investing in a cryptocurrency that is backed by palladium may be the right route to take for knowledgeable Investor write for us looking to diversify their portfolios. Palladium Coin, in particular, has the qualities of an interesting investment. It is secure and easy to buy, sell, and trade. Moreover, it requires little effort to redeem for physical palladium.