As Bitcoin and golden reach 2020 drops, Uphold unveils a revolutionary new product redefining “store of value” to get a panicked era.
It’s gold. It’s crypto. It’s government-backed. It’s a brand new product in the Silicon Valley company mutating gold and crypto to one unit. And it’s as profoundly fear-soaked as anything because, well, 2020.
Nowadays Uphold, an electronic investment system located in San Francisco, announced what it requires “a better form of gold”: Universal Gold. Users can purchase the golden crypto UPXAU — a token verifiable on the Ethereum blockchain and audited by the security company CertiK — also Uphold instantly contracts to purchase physical gold in the Government of Western Australian.
From this instant, the investor owns the gold. She can invest parts of it with her Uphold charge card, or take physical shipping: Uphold will send the FedEx
UPXAU would be to crypto fund exactly what “clicks and mortar” was to e-commerce, a simultaneous merger of their electronic and the physical.
It all began back in March, when among Uphold’s shareholders, a dyed-in-the-wool gold bug, stumbled upon GoldPass, an Australian government application issuing certificates which ensured physical shipping of gold. He called Uphold CEO J.P. Thieriot who utilized the app to make the Universal Gold token.
“The gold is held with the Perth Mint, the largest refiner of new gold in the world,” states Thieriot. “The mint issues a gold certificate, one token equals one certificate which equals one ounce. One-to-one-to-one. When you buy the token, you’re buying gold. It’s not hypothecated, it’s not fractional. You’re buying gold.”
Thieriot expects that this allure to gold bugs that have wrestled with the difficulty that purchasing physical gold is difficult to do. It’s expensive to shop, often devoting monthly custody charges of approximately 0.4%, and has traditionally been costly to liquidate and become cash.
To be sure, there are several other products on the market like UPXAU (That I’ve determined ought to be announced “UP-zow.”) You will find institutional futures contracts in the CME Group
There are blockchain comps, digital assets like PAX Gold (PAXG) or Digx Gold (DGX), but they charge on-chain fees of 0.02% and 0.13%, respectively. There’s Tether Gold (XAUt), which charges some users 0.25% when they buy the product and another 0.25% when they sell it.
“I can’t even believe there is a Tether gold product,” says Therot, dismissively. “I think family offices would give a very wide berth there.” (At press time, Tether had not responded to a request for comment.)
Uphold is part of the broader trend towards zero-fees, dragging along competitors as Robinhood inspired its competitors to eliminate fees in the stock brokerage business.
Still, it’s not for everyone. I’m a huge fan of some gold bugs. But I gave up on “store of value” investments after reading Warren Buffet’s 2011 letter to Berkshire Hathaway (BRK. )A: NYSE)
But in that same letter, Buffett wrote: “What motivates most gold purchasers is their belief that the ranks of the fearful will grow.”
During 2020, the ranks of the fearful have grown. And have you read a newspaper lately? Those ranks are surely still growing. No surprise gold is up 26% this year and Bitcoin has risen 55%.
Gold might be the exception to the rule that, in the end, the purpose of a tool is to be useful. In the end, it may be that the value of Bitcoin, Ethereum, XRP and others will lie in their functionality — not just the idea that a few other moron will show up and pay more for it.
But for investors right now, liquid assets with limited supply are all the rage, be they Bitcoin or gold. Or, today, Ultimate Gold.
“One isn’t a replacement for another,” states Therot. “I think there’s room for all of that. Gold is like Bitcoin’s big brother. Recent events are probably the giant tailwind for both.”