Gold Backed Crypto

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Peter Da Vanzo

Jun 14, 2022



In times of high inflation, investors have often considered buying gold. 


But can you buy gold backed crypto in Australia? “Gold backed crypto” is a commonly used term, but it’s more accurate to describe it as “a tokenized digital asset backed by physical gold”. Gold is typically stored at a bullion company. The crypto is in the form of a tokenized digital asset. 


In short, yes, you can buy gold in the form of a digital asset in Australia.  



Why Do Investors Consider Gold? 


In recent times, we’ve seen the price of gold nearly triple between 1998 and 2008, reaching $1,000 US an ounce in early 2008, and nearly doubling to $2000 US beyond the crash and well into 2012. Earlier this year, the SPDR Gold Shares ETF is up 6.6% whilst the S&P500 is down 13%. 


High interest rates, inflation, political turmoil and economic uncertainty prompt investors to consider other options besides stocks, bonds and cash. Gold is viewed by some investors as an attractive spot to hold their wealth during a raging economic storm. 


Ways To Buy Gold In Australia


There are a number of ways to buy and hold gold. 


One way to buy precious metals is through a bullion coin. 


A bullion coin is a coin that is made from precious metal but it is not for everyday use as an exchange of value.  The downside of gold bullion is storage. Either an investor must find a way to store it safely or pay a trusted third-party to do so. There’s also no way to get a fractional share of gold bullion.


Another way to buy gold is through an ETF. 


An exchange traded fund holds gold as their underlying asset or invests in gold futures contracts. For those who trade stocks on a regular basis, these options are easier than purchasing and holding physical gold bullions. The transaction costs associated with gold ETFs are often lower than the costs related to the purchase, storage, and insurance of physical gold.


Investors may also buy stocks in companies directly linked to gold. 


One example would be to buy stocks in a gold mining company. One issue to be aware of is that the price of the stock is also based on the fundamentals of a company’s profitability and expenses, so it won’t track the price of gold precisely. 


There’s now a new way for those who prefer to buy and hold crypto assets. 


How To Buy Gold Crypto Assets In Australia


One of the easiest ways for those who have a crypto account is to buy tokenized gold


Investors can get an asset token which makes for easy and quick transactions anywhere in the world. Precious metal-backed tokens are also more liquid than other forms of precious metal ownership as they can be traded 24/7, from anywhere in the world. Investors can buy gold asset tokens as easily as they can buy Bitcoin. 


Dacxi sells a variety of precious metal coins including Gold, Silver and Platinum at market value. These can be purchased as a bundle or individually. Each Dacxi Gold token (DGXT) in circulation is backed by one ounce of gold bought and stored in one of the worlds leading bullion houses. If an investor wants to move out of gold at some point in the future, they simply sell the tokens. 


For more on buying gold and other precious metals through Dacxi please go to Dacxi Precious Metals Bundle.  


The Important Role Of Gold


Gold has always played an important role in the international monetary system. 


Gold coins were first issued in Lydia (now part of Turkey) around 550 BC. They circulated as currency in many countries before the introduction of paper money.


By the late 19th century, many of the world’s major currencies were fixed to gold at a set price per ounce. In 1861, the US treasury printed the first U.S. paper currency. The Gold Standard Act of 1900 established gold as the only metal for redeeming paper currency. European countries who wanted to standardise transactions soon adopted the ‘gold standard’. It guaranteed that the government would redeem any amount of paper money for its value in gold. This meant that transactions no longer had to occur using the heavy gold bullion or coins; instead paper currency was used as it guaranteed its value to something real. 


During the Second World War it became clear that a new monetary system was needed to replace the Gold Standard as many countries had their currencies removed from the gold standard in order for them to print more currency bills to help finance their war effort. After the war, the world pegged their currency to the US dollar which was again backed by gold, yet the US government still wanted to print more money, President Nixon removed the gold backing in 1971 and the new era of ‘FIAT currency’ was born.


Today no currency is backed by gold and Reserve Banks have dramatically increased the money supply globally to stimulate their economies. This is one of the reasons people are looking to buy gold rather than hold onto devaluing fiat currency. 


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