Why gold-backed crypto’s a good bet in a bear market

Presented by Asia Broadband

You’ve heard the phrase “the gold standard,” a reference to the best, most reliable or most prestigious thing among its peers. The term comes from gold’s long history of backing currencies across the globe. It’s been a long time since gold coins have been used to exchange value, but they’re still collected both because they are rare and because the metal is considered to be a financial just-in-case option for many investors.

Gold is what investors call a “crisis commodity,” a buffer in case of market instability and inflation, or a potential drop in the value of the US Dollar. In fact, analyst say commodities are in what he calls a supercycle, or a period of decades in which commodity prices are continuously higher than long-term trends.

That should make investors sit up and take notice of gold-backed cryptocurrency, says Chris Torres, the president, CEO, COO and director at Asia Broadband (OTCMKTS: AABB), which has its own gold-backed cryptocurrency, the AABB Gold token (AABBG).

“We believe that we’re one of the few companies that are perfectly positioned to be at the center of this supercycle since our company’s primary focus is on the production, supply and sale of precious and base metals,” Torres says.

Going for gold in a volatile market

Gold is a good bet for even more reasons, especially now. Sales of gold tend to boom with downturns in the market and when anxiety about stability skyrockets. Its price tends to rise when cost of living increases, and when confidence in governments is low, so it’s an excellent strategic inflation hedge, Reuters says.

 And as world tensions rise, gold tends to outperform other investments. As emerging market economies gain wealth, the demand for gold gains momentum. Investors say commodities like gold are an essential investment class to allocate funds. For instance, in 2019 Standard & Poor’s depository receipt (SPDR) Gold Trust became one of the largest exchange-traded funds in the U.S. and the largest holder of gold bullion in the world.

So unsurprisingly, the recent downturn in global markets in general, kicked off by rising inflation, the COVID-19 crisis, and the Russian-Ukraine war have all made gold investment more attractive than ever. To reduce your investment portfolio’s overall volatility and risk, gold is an essential investment. It has stood the test in the long term against the erosion of currencies and inflation and holds the line when paper investments drop. Gold-backed crypto currency is another smart way to diversify.

The tokenization of gold

Tokenization, based on the premise that all the tangible and intangible assets can be converted into digital tokens that represent them, was ripe for a token backed by gold, which have been a bright spot for investors this year, Fortune said.

The US-based Asia Broadband, a resource company focused on producing, supplying and selling precious and base metals to Asian markets, released its own mine-to-token gold-backed cryptocurrency, the AABB Gold token (AABBG).

“Through AABBG, we’re merging the stability of gold with the technological innovation of cryptocurrency and blockchain, which provides individuals the opportunity to invest in gold without the need to store the heavy physical gold,” Torres says. “AABB aims to have its stable and secure gold-backed token become a worldwide standard of exchange with the added benefit of demand-based price appreciation.”

By launching a hybrid-crypto whose price is directly tied to gold that the company owns, Asia Broadband is doing something that others attempting to get into this sphere can’t.

Because of its vertically integrated mine-to-token concept, AABBG is backed by $30 million of its own gold bullion, which comes from its mines in Mexico, as well as traditional third-party sources. The idea for AABBG is that the immutable blockchain provides a cost-effective and safe way to store data, and the long-term stability of the gold shields the investment from the high volatility of the crypto market – especially recently.

“Besides stability, the token holders enjoy the upside as AABBG rises due to increasing gold prices,” Torres added. “And in the current environment of rising inflation and devaluing fiat currencies, the bull case for gold still remains strong.” 

Why Asia Broadband

In the first two weeks of launch, AABBG saw $1M in investment, and currently has $100 million in assets, with a circulating supply of $5.4 million. The company offers extensive experience in the precious metal industry, managing the entire production process from mining its physical holdings to its sales networks in Asia.

Last year, the company began to aggressively expand operations. It sold its principal gold mining site for $82 million, which it reinvested in other gold-rich mining areas. The proceeds from the mine sale back the AABBG token 100%, and the minimum price of the AABBG token is set at the current spot price of gold, to reduce investors’ risk.

On the crypto side, Torres expects the price to continue to appreciate based on its market demand in relation to the limited supply of tokens available for purchase and exchange – which is 5.4 million AABBG tokens, or equivalent to the value of the gold bullion in its treasury.

“On top of this, we recently reinforced our commitment to the crypto sphere even further by seeking to actively grow our presence in Central America and build up demand for AABBG by setting up a satellite office in crypto-friendly El Salvador,” Torres added.

And to continue to drive the adoption of its gold-backed token, the company launched the AABB app in March, on both the Apple App Store and Google Play Store. On the app, users can use the wallet to purchase its token, as well as send and receive crypto, for a small fee. The app doesn’t collect personal data, and its security features ensure that transactions are 100% invisible to third parties.

In June, the company expects to launch its new product, PayAABB, a payment gateway for merchants to accept crypto payments.

“Our privileged position within this field and our organization’s solid fundamentals have seen us catch the attention of the rapidly growing Stocktwits and Reddit retail investors who are hoping we’ll be the next GameStop, but ours is a project with much more substance to it than mere social media hype,” Torres says.

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