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Ethereum

Precious Metals Firm Kitco Launches Gold-Backed Tokens Built on Ethereum – Bitcoin News

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On August 4, the precious metals firm Kitco Gold announced the launch of a gold-backed stablecoin which will leverage an audit process via Cohen & Company with monthly attestation reports. Kitco has partnered with Tradewind Markets, First Digital Trust, and Stably, an asset tokenization provider. The gold-backed ERC20 tokens called “kitco gold (KGLD)” “represent one true, troy ounce of fine gold,” according to Kitco.

Kitco Launches KGLD Token Backed by a Troy Ounce of .999 Gold

In the seventies, Bart Kitner started trading gold with funds he got from a loan and managed to expand his business into a massive precious metals company from a mere $700 investment. The global precious metals (PMs) market, Kitco, is considered an authority when it comes to PMs like gold, platinum, palladium, and silver. The Montreal-based PM company also runs a popular PM-focused website that offers financial news and PM market data.

Now the company is getting into cryptocurrency solutions as Kitco revealed it has partnered with the custodian First Digital Trust, the blockchain provider Tradewind Markets, and tokenization firm Stably. Kitco will launch a token called kitco gold (KGLD) which will translate into a single troy ounce of .9999 fine gold. The Kitco ERC20 tokens will be backed by gold reserves held in Directreserve vaults. The well-known CPA verification firm Cohen & Company will bolster the coin’s attestation process.

Precious Metals Firm Kitco Launches Gold-Backed Tokens Built on Ethereum

Because Kitco’s token is an ERC20, the firm believes the coin can be easily added to exchanges, wallet platforms, and defi ecosystems. The token’s value is recorded in real-time using the same market value of the spot gold price. John Dourekas, the chief business development officer of Kitco Digital Metals Group, explained on Wednesday that Kitco has been anticipating the release of KGLD.

“We’ve been looking forward to unveiling Kitco Gold, representing a digital receipt of physical gold ownership, which is digitally spendable,” Dourekas said in a statement. “Buyers will be able to access a secure and reliable gold token, the most robust asset class to date. Institutional investors will have a competitive alternative to traditional gold products such as gold ETFs, with the additional benefits of real-time trading and settlement enabled by blockchain technology.”

Gold Tokens Jump 30-Fold Since 2020, Kitco’s Gold Coin Will Face Competition

Kitco’s announcement follows the recent report published by Arcane Research which details that gold-pegged tokens have jumped in value 30x since the start of 2020. The PM dealer’s move also follows the largest increase in inflationary pressure since the 2008 financial crisis. Kitco has further indicated there’s been a trend of traditional financial institutions looking for stable hedges like PMs and crypto-assets.

“Trust and verification are hallmarks of a well-functioning market,” Tradewind Markets CEO Michael Albanese said during Kitco’s gold-backed token launch announcement. “We are pleased to be applying best practices from other asset markets to make gold as an investment asset more secure, accessible, and cost-efficient.”

Kitco’s KGLD creation will face gold token competitors as there are tokenized versions of both troy ounce measurements of gold and grams as well. KGLD will face projects like Tether Gold (XAUT), Digixglobal (DGX), PAX Gold (PAXG), Perth Mint Gold Token (PMGT), Gold Coin (GLC), and many more. In 2020, on a few occasions reports had shown gold-backed tokens were fetching premiums.

What do you think about Kitco’s gold-backed ERC20 token launch announcement? Let us know what you think about this subject in the comments section below.

Tags in this story
crypto assets, Digixglobal (DGX), ERC20, Ethereum, gold, Gold Investing, Gold-backed tokens, KGLD, KGLD tokens, Kitco, Kitco Digital Metals Group, Kitco Gold, kitco gold (KGLD), PAX Gold (PAXG), PM, PMS, Precious Metals, Tether Gold (XAUT), Traditional Finance

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Ethereum

$25B investment firm adds ‘riskier’ Grayscale GBTC and ETHE for clients

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Bitcoin (BTC) and Ether (ETH) exposure has come to one of the world’s biggest automated investment firms.

In a blog post on July 29, Wealthfront, which has $25 billion in assets, confirmed that it had added two Grayscale funds to its suite of investment options.

GBTC buzz returns

The recent rise in cryptocurrency prices has kept institutional products such as Grayscale’s various funds in the spotlight.

Wealthfront, an example of a so-called “robo advisor” in the investments space, will now allow its clients exposure to the Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE).

“Buying cryptocurrency can feel intimidating — it takes time and effort to research all of the options, set up a wallet, and monitor an additional account. That’s why we’ve made it easy to get exposure to Bitcoin and Ethereum right in your Wealthfront portfolio, no wallets required,” the blog post explains.

“Instead of buying coins yourself, you can invest in GBTC and ETHE.”

Clients will be able to have up to 10% of their portfolio in Grayscale products, a limit the firm attributes to the “riskier and more volatile” nature of crypto products.

The move nonetheless reduces the ease-of-access dilemma faced by those interested in Grayscale’s funds, which are not always directly available, and place strict rules on shareowners.

Alongside Grayscale, meanwhile, Wealthfront increased its offering of exchange-traded funds (ETFs) from ARK Invest, itself a major GBTC stakeholder.

ARK Invest’s GBTC holdings (purple). Source: Cathiesark.com

What unlocking?

The announcement comes as institutional interest in Bitcoin in particular shows no signs of decreasing at prices around $40,000.

Related: Bitcoin open interest mimics Q4 2020 as new report ‘cautiously optimistic’ on BTC rally

As Cointelegraph reported, exchange balances have fallen sharply this week, as over-the-counter (OTC) desks also see significant activity.

For its part, Grayscale has rid itself of a negative narrative surrounding unlocking of GBTC shares after the events had no perceptible impact on BTC price action.

Its CEO, Michael Sonnenshein, this week reiterated a pledge to turn all Grayscale crypto funds into ETFs at the earliest opportunity, subject to regulatory changes in the United States.