In particular, digital gold platform SafeGold is recording a spike in the number of transactions involving 5.7 million users, LiveMint reported on October 28. SafeGold, which allows customers to buy, sell and receive vaulted gold saw males at 81% dominate transactions, while female customers represented by 19%. Notably, most traffic originated mainly from tier-one cities, including Mumbai, Hyderabad, and Delhi. The peak traffic was recorded on October 22. A majority of the transaction, at 44%, was completed through Unified Payments Interface (UPI), which accounts for the largest ticket size of ₹5,50,000 ($6,668). Additionally, the transactions were led by individuals aged between 18-34. Furthermore, gifting and saving through digital gold allowed customers to save over ₹1,95,00,000 ($236,429) in making charges per the average industry standard. The spike in transactions follows a recent decision by SafeGold to allow customers to lease their idle gold to medium and small-scale jewelers. In return, the customers will get 2.5-5% yields.
Investors likely shunning physical gold
It is worth noting that digital gold operates like regular physical gold and is bought online with storage insured in vaults by the seller on behalf of the customer. The surge in digital gold transactions potentially points to reduced interest in physical gold. In most cases, physical gold is usually purchased for jewelry purposes and can not be classified as an investment option. Elsewhere, physical gold can be viewed as inconvenient since it comes with extra charges catering to elements like storage.
Safe haven status battle
It is worth noting amid the ongoing economic turmoil, the focus has turned to gold over its status as a store of value and hedge against inflation. Notably, the precious metal’s sustainability has been questioned, especially with the emergence of cryptocurrencies like Bitcoin (BTC). In this line, Finbold reported that Ethereum (ETH) co-founder Vitalik Buterin stated that gold is inconvenient and difficult to use when transacting. This comes as Bitcoin recorded price stability around the $19,000- $20,000 zone, partly contributing to the asset’s dropping volatility. Overall, both Bitcoin and gold are battling for safe haven status, with the two assets’ correlation hitting a 40-day high as of October 22. Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
