In a shaky market, tokenized RWAs could be worth their weight in gold | Opinion

Sometimes, people tend to “play it safe,” prioritizing security and stability over the uncertainty and perhaps excitement that comes with change. We may long for the thrill of stepping out of our comfort zones, but the fear of the unknown often keeps us anchored to familiar routines. 

This cautious approach is often mirrored in investment strategies. Today, most investors adopt a more cautious, conservative stance, favoring investment tools and options promising minimal risks with dependable returns. This inclination for safety reflects people’s desire to protect their hard-earned capital while achieving a strong return on investment. 

Crypto isn’t immune from these perceptions. Despite the potential for high returns, many view crypto as risky due to volatility and the uncertainties surrounding regulation and safety. For those accustomed to the relative stability of traditional investments, the uncharted territory of sectors like decentralized finance is likely incredibly daunting.  

However, the “safest” returns aren’t always the most accessible to everyone. The gap between accessibility and safety highlights the trade-offs investors must consider when evaluating investment opportunities.

What actually makes an investment safe?

Typically, a safe investment is characterized by low volatility and minimal risk, like gold. Historically, gold has retained its value through periods of economic instability, political turmoil, and economic fluctuations, as its value is derived from physical properties and scarcity, contributing to its reputation as a safe-haven asset. Just a few months ago, Costco was selling as much as $200 million in gold bars monthly.  

Despite its safe reputation, however, investing in gold is not straightforward. Physical gold, whether in bars, coins, or jewelry, requires a substantial initial investment. Recent reports reveal that the average gold bar weighs around 400 troy ounces and is priced at around $1 million. Not to mention, the costs associated with storing and insuring physical gold can deter investors unless one plans to keep gold bars buried in their backyard. 

While exchange-traded funds are more accessible than possessing a bar of gold, owning gold stocks comes with its own set of trade-offs. Recently, the spot price of gold has risen to over $2,500, making it challenging for everyday people to make such an investment. 

This is why tokenized real-world assets have such a high appeal, as they have the potential to bring safety-minded individuals looking for more grounded investments into crypto. Of course, there’s been a lot of discussion surrounding its use for real estate or fine art, but precious metals are one of the most no-brainer applications to get investors involved.

That being said, buying tokenized gold is mostly restricted to 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 instance, is a blockchain-based fintech company helping bridge the gap between traditional and digital finance. Recently, the app, which already offers tokenized real-estate services, opened up opportunities for its users to invest in tokenized gold. 

Now, users can actually fractionally invest in these digitized assets through the app, allowing them to contribute their desired amount to the asset. This fundamentally opens the door for more democratic gold investment, as clients can invest in a range of blue-chip assets without having to take out a second mortgage or gain a PhD in tokenomics to get involved.

Investing in tokenized real-world assets provides equal opportunity for investors to engage with assets commonly considered to be “safe.” By eliminating common investment barriers, RWAs create an environment where a broader range of investors can pursue financial security and growth. This new wave of finance that embraces crypto not only supports individual financial goals but contributes to a more inclusive and equitable financial system.