There is a steady increase in the popularity of crypto stablecoins. As usual, when there is a hot new trend, many are jumping on the bandwagon. Many options are available on the market for those fascinated with digital currencies backed by precious metals. Gold is the most popular of the bunch, but others include platinum, palladium, and — the topic of this article — silver. While constantly playing second fiddle to gold, silver is just as popular among precious metals.
Cryptocurrencies backed by precious metals, such as silver, offer unique ways of purchasing silver bullion and adding precious metals to a portfolio. Options like Silver Coin give people the ability to invest in fractionalized silver-backed digital assets that they can also redeem for physical silver.
For over 4,000 years, humans are believed to have been storing part of their wealth in silver. In terms of investments, silver provides a vital asset that has maintained substantial value for millennia. Recently, there has been a boost in demand for industrial silver, thus adding to investors' value with the metal. Silver is frequently used in the creation of jewelry, cell phones, and the production of chemicals and photovoltaic cells. Increasing the investors' attraction is its practical use, as well as its limited supply.
Silver-backed cryptocurrencies have garnered attention because, at minimum, the coin will equal the metal's spot price. Should the coin prove to be popular with investors, the cryptocurrency price could rise above the spot. This factor applies more to coins backed by silver than those backed by gold.
Those investing in silver-backed cryptocurrencies can take advantage of the volatility and invest in silver-backed coins. If these coins become popular, investors could reap the benefits of strong returns on investments as they exceed the spot price; a surging one to be exact.
Now that we know why investors flock to silver and silver-backed crypto, we can look at notable examples of these particular stablecoins.
Arguably the most popular name in silver-backed crypto, Silver Coin is the first fractionalized silver-backed asset that can be bought with fiat currency or other digital currencies. Its inclusive and fractionalized nature makes it an ideal option for investors. Its security measures also add to its appeal, including two-factor authentication upon login to reduce the possibility of a hack.
Investors do not need to provide identification when they want to purchase Silver Coin. All they need to receive the crypto is an Ethereum wallet address.
The team behind Silver Coin offers a live stream that allows investors to view the silver bullion backing the coins. They can also get easy access to published reports of audits. Those investing in Silver Coin can redeem for 99.9% silver bullion anytime they want.
Each SilverToken embodies ownership of silver at a rate of 1:1 with a single ounce of investment-grade bullion. The creator of the coin only holds 99.9% silver and follows the standards established by the London Bullion Market Association.
Holders have a choice. They can convert their silver-backed crypto to physical bullion and have it mailed, or they can sell coins back to SilverToken. Buy-backs require 100 SilverTokens at a minimum. SilverToken also created the SilverDollar (SLVD), which is always worth $1.
The coin can be used for purchasing goods and services. The team behind SilverToken states that the SilverDollar's stable value makes understanding its purchasing power relatively easy.
Built on Ethereum, the basic concept of Silverlink is that investors can purchase digital silver as easily as any other digital currency. One Silverlink token (LKNS) is equal to 1 gram of 0.999 certified silver.
After placing an order on the Silverlink website, physical bullion is obtained at the lowest spot price across markets in Mexico, Peru, Russia, Australia, China, and Chile. Upon establishing the proof of ownership, an LKNS token will be mined via a smart contract when a vault receipt is received. Available tokens can be bought, traded, or stored inside a wallet that is ERC-20 compatible.
There is a fixed fee that is charged on every LKNS order. This will go to those holding Link's LNK token, which the Link Platform offers.
Cryptocurrencies backed by physical assets are growing in popularity and show no signs of slowing down. Silver-backed crypto is set to grow in influence as the stablecoin market continues to expand.