In June 2022, the global crypto market cap fell below $1 trillion for the first time since January 2021. With Bitcoin trading down 65% from its all-time high of $69,000 in November, the largest cryptocurrency by market value crashed for 12 straight weeks — a breakout downturn for the digital asset.
Following that, the second largest cryptocurrency, Ether, is trading below $1,300 at around $1,235, down 74% from its all-time high of $4,878. No other cryptocurrency has seen such a fall since December 2020.
Crypto winter followed after the Bureau of Labor Statistics released monthly inflation data from the consumer price index (CPI), which showed an 8.6% year-over-year increase in October. 5, much higher than estimates from Wall Street.
In these uncertain market conditions, investors look for solutions to hedge against inflation. During many past recessions and bear markets, gold has proven to be a safe haven for investors around the world. As a result, many traders and investors choose to invest in gold to protect their capital against the slide in value that occurs as a result of inflation causing the overall price increase.
Since the price of gold is related to the value of the US dollar since gold is priced in dollars, a stronger dollar keeps the price of gold down and more controlled, meaning more gold can be bought as the dollar goes down. weaker dollar. This protects investors against economic events such as currency devaluation and provides a safety net during times of political uncertainty.
Despite its utility, investors should be aware that many gold miners fail due to high overheads, debt, financing, lack of commodity price controls, and non-compliance. Investors looking to get into the gold-backed cryptocurrency sometimes fail because they cannot create commercial value nor sustain it.
One company trying to provide a solution to this problem is Zambesi Gold, a thriving business that aims to lead the transformation of mining assets into fully-backed digital assets. Describing itself in its whitepaper as “powered by real gold, real people, and real mining combined with real value,” the company believes that the current problems in gold investing exist because of The company “lack of business plan leads to lower interest rates and productivity. “
To address these issues, an agreement between Zambesi Token and its investors ensures that no fractional lending occurs. “The number of tokens will be fixed, preventing inflation; therefore, the value of the token will increase regardless of the demand for the token or the price of gold, and the amount of gold backing for each token will increase each month. “
Zambesi believes that each asset should contribute to the profitability of the business and not subsidize the other assets to reduce the cost of debt. It allows token holders to become beneficiaries of the Gold Custodian Trust, a vault where physical bullion is stored. Since being listed on May 12, ZGD coin has seen a steady increase of 500% and has never traded at the launch price.
In today’s bear market, investors are constantly looking for ways to protect their portfolios against inflation. While gold has proven to be a safe haven for investors, it is still not without risk and many investments can take a long time to pay off. Therefore, instead of traditional methods of investing in gold, investors can look to gold-backed cryptocurrencies like Zambesi for a safe and secure way of investing in assets. more reliable.
To learn more about this exciting new project, visit Zambesi Gold’s website today.