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Sometimes people tend to “play it safe,” prioritizing security and stability over the uncertainty and excitement that comes with change. We may want to step out of our comfort zone, but fear of the unknown often keeps us stuck in familiar routines.
This cautious approach is often reflected in investment strategies. Today, most investors are adopting a more cautious and conservative attitude, favoring investment tools and options that promise minimal risks and reliable returns. This trend toward safety reflects people’s desire to protect their hard-earned capital while still earning a high return on their investment.
Cryptocurrencies are not immune to these perceptions. Despite the potential for high returns, many consider cryptocurrencies to be risky due to volatility and uncertainties surrounding regulation and security. For those accustomed to the relative stability of traditional investments, the uncharted territory of sectors like decentralized finance is likely incredibly intimidating.
However, the “safest” returns are not always the most accessible to everyone. The gap between accessibility and safety highlights the trade-offs that investors must consider when evaluating investment opportunities.
What In fact makes it a safe investment?
Typically, a safe investment is one that has low volatility and minimal risk, such as gold. Historically, gold has held its value during times of economic instability, political unrest, and economic fluctuations because its value comes from its physical properties and rarity, contributing to its reputation as a safe haven asset. Just a few months ago, Costco was selling up to $200 million worth of gold bullion per month.
Despite its reputation as a safe bet, investing in gold is not easy. Physical gold, whether in the form of bars, coins, or jewelry, requires a significant initial investment. Recent reports show that the average gold bar weighs about 400 troy ounces and is worth about $1 million. Not to mention, the costs associated with storing and insuring physical gold can be a deterrent to investors, unless they plan on keeping gold bars buried in their backyard.
While exchange-traded funds are more accessible than owning a gold bar, owning gold stocks comes with its own trade-offs. Recently, the spot price of gold has surpassed $2,500, making it difficult for individuals to make such an investment.
This is why tokenized real assets have such appeal, as they have the potential to attract security-conscious people looking for more solid investments to cryptocurrencies. Sure, there has been a lot of discussion around its use for real estate or fine art, but precious metals are one of the most obvious applications to engage investors.
That being said, buying tokenized gold is mostly reserved for financial stalwarts like HSBC, who have their own “gold token” that many retail investors likely can’t get their hands on. Regular investors who want to explore tokenized gold deserve a way to do so at their own pace.
FreeBnk, for example, is a blockchain-based fintech company that helps bridge the gap between traditional and digital finance. Recently, the app, which already offers tokenized real estate services, opened up investment opportunities in tokenized gold to its users.
Now, users can invest fractionally in these digitized assets through the app, allowing them to contribute whatever amount they want. This fundamentally opens the door to more democratic gold investing, as customers can invest in a range of prime assets without having to take out a second mortgage or get a PhD in tokenomics to get involved.
Investing in tokenized real assets provides investors with an equal opportunity to invest in assets that are generally considered “safe.” By removing common barriers to investment, RWAs create an environment in which a broader range of investors can seek financial security and growth. This new wave of finance that embraces cryptocurrencies not only supports individual financial goals, but also contributes to a more inclusive and equitable financial system.
