Millennials and Generation Z flock to buy digital gold amid economic turmoil

With the Christmas holidays approaching amidst the prevailing macroeconomic factors, most investors are showing an increasing preference for digital gold as an investment option.

In particular, the digital gold platform SafeGold records an increase in the number of transactions involving 5.7 million users, LiveMint reported on October 28.

SafeGold, which enables customers to buy, sell and receive domed gold bars, controls 81% of transactions, while women represent 19% of clients. Notably, most of the traffic came mainly from first-tier cities including Mumbai, Hyderabad and Delhi. Peak traffic was recorded on October 22.

The majority of the transaction, 44%, was completed through the Unified Payments Interface (UPI), accounting for the largest ticket size of €5,50,000 ($6,668). In addition, the transactions were led by people between the ages of 18 and 34 years. Additionally, gifting and saving through digital gold has allowed customers to save over INR 1,95,00,000 ($236,429) by charging at average industry standards.

The increase in transactions follows SafeGold’s recent decision to allow customers to lease their inert gold to medium and small sized jewelers. In return, customers get a direct return of 2.5-5%.

Investors are likely to avoid physical gold

It should be noted that digital gold works like regular physical gold and is purchased online with secured storage in vaults by the seller on behalf of the customer. The rise in digital gold transactions is likely to signal a decline in interest in physical gold. In most cases, physical gold is usually purchased for jewelry purposes and cannot be classified as an investment option.

Elsewhere, physical gold can be considered inconvenient as it comes with additional charges for items such as storage.

Safe Haven Mode Battle

It is noteworthy that, amid the ongoing economic turmoil, the focus has shifted to gold on its position as a store of value and a hedge against inflation. In particular, the durability of the precious metal has been called into question, especially with the advent of cryptocurrencies such as Bitcoin (BTC).

In this line, Coinphony reported that Ethereum (ETH) co-founder Vitalik Buterin said that gold is inconvenient and difficult to use in transactions.

This comes as Bitcoin recorded price stability around the $19,000-$20,000 region, partly contributing to the asset’s lower volatility. Overall, bitcoin and gold are vying for safe haven status, with the correlation between the two assets hitting a 40-day high on October 22.

warning: The content of this website should not be considered as investment advice. Investments are speculative. When you invest, your capital is at risk.

Millennials and Generation Z are flocking to buy digital gold amid the economic turmoil that first surfaced on Coinphony.

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