Crypto & Gold Share A Common Thread
Bitcoiners are known to love BTC and Crypto in general for very much the same reason gold bugs love gold! It is hard money, both have to be mined and both require work to be brought into circulation. There are no short cuts and there is no brrrrrrr machinery to create an excessive supply.
Though this is not the case for all Crypto, it is definitely the case for Bitcoin. BlockFi are now offering PAX Gold, which is a token pegged to the price of gold.
PAX Gold is a standard ERC20 token built on ETH and is unfortunately affected by currently high gas fees. Hopefully 2021 will bring some relief in the form of cheaper gas fees and other improvements in the form of ETH 2.0. A tip I have shared before, if you buy Crypto on FTX spot markets, you are able to withdraw your coins and tokens with zero fee. This really helps when gas fees are so high! PAX Gold and USDT can both be purchased on FTX and withdrawn at zero cost.
BlockFi will be kicking off with an annual yield of 4% for PAXG, which is decent. These interest rates are subject to change, as BlockFi recently increased the interest rate on BTC to 6% per year.
In my review of BlockFi I mentioned how I really love the ability to earn interest on multiple Crypto coins and yet earn all of my interest in BTC. This is what I will be doing with PAXG! Currently I am holding BTC and ETH in my BlockFi interest bearing account and receiving all of my interest in BTC.
I will be adding some PAXG from time to time but will also be earning my interest in BTC, which I think is a nice hedge that will also increase my BTC holdings. Though BTC and gold often move in similar patterns and are somewhat correlated, gold is not subject to such large price drops as BTC. The two may drop simultaneously but in percentage terms gold is pretty mild in comparison to BTC.
Don't Forget USDT
When it comes to Tether, I must be honest that I only use it for very short periods and am not that keen on holding it long-term. I would rather use USDC if I was going to hodl a dollar pegged stable coin. Though I am sure there are others who would take advantage of this opportunity, especially as the interest rate is 7% per annum.
BlockFi is a great service but always exercise caution as utilizing such a service means surrendering your private keys. Though they are well connected and have very reputable partnerships, anything can happen, so just make sure you are aware of the risks if you choose to Utilize BlockFi.
Please remember that this is not financial advice, do your own research and enjoy the journey!