At a time when demand for gold is high and the bitcoin price just acutely pushed over $7,000 again, peer-to-peer bitcoin trading platform Paxful is making it easier to trade between the two hedge assets.
On Tuesday, March 7th, PAXFUL unveiled a new service that will allow users to buy or sell gold for bitcoin. The new support makes gold only the latest of more than 300 payment methods already supported on the P2P marketplace.
“Vendors on the platform expressed a great interest in the addition of gold as a payment method,” Ray Youssef, co-founder and CEO of Paxful, said on the news.
Bitcoin: Africa’s P2P Currency
Contents
- 1 Bitcoin: Africa’s P2P Currency
- 2 Gold and Digital Gold Up
- 3 Gold in Hot Demand
In 2019, Paxful facilitated more than $1.6 billion USD worth of P2P bitcoin-backed trades, and a considerable portion of that volume came from a boon in the marketplace’s African userbase. Paxful has previously reported that its Africa-centric trade volume grew by nearly 60 percent last year.
Upon the announcement of marketplace’s new gold support, then, CEO Youssef said bringing more financial options to its African users certainly factored into the platform’s decision:
“Gold has been used as a store of value for millenniums and its importance to the economy has rarely dwindled. We believe by adding a gold payment option to the platform we can continue to drive our mission of financial inclusion in places such as Africa, where high gold concentrations will grant them access to bitcoins they may have not have been able to purchase otherwise.”
Earlier this year, the marketplace reported that almost half of its more than 3 million wallets originated from African users. That’s a significant statistic, especially at a time when many global cryptocurrency exchanges don’t cater to or even service African traders.
“People in Africa are teaching us about the true use cases of bitcoin and the opportunity it presents for greater financial inclusion of the under-banked,” Paxful co-founder and COO Artur Schaback said at the time.
Gold and Digital Gold Up
On April 6th, both Wall Street and the cryptoeconomy saw an intraday rally as traders seemingly latched onto optimism that the ongoing COVID-19 pandemic was potentially being brought under control.
Indeed, at Monday’s market close, the top three U.S. stock indexes — the S&P 500, the Nasdaq Composite, and the Dow Jones — were each up 7 percent. Bitcoin matched that 7 percent rise, climbing to just under $7,300 on the day. Ethereum’s ether (ETH) was up 16 percent, to around $165.
On Monday, the price of gold also notably climbed above the $1,700 price mark again. The performance comes after gold traded as low as $1,480 last month.
The fresh buy pressure into the major deflationary asset may be coming from the inflationary economic environment that the COVID-19 pandemic has set off, argued Bill Baruch, the founder and president of brokerage firm Blue Line Futures, in a CNBC op-ed on April 6th:
“With the global economy contracting, currencies around the world all devalued at the same time, and U.S Treasury yields hitting record lows, this reinvigorates not only safe-haven characteristics for gold but its reserve currency characteristics.”
Gold in Hot Demand
Retail investors are unsurprisingly trying to buy up gold right now, but an acute shortage caused by a demand spike has led to a seller’s market around the precious heavy metal in recent days.
To that end, a Bloomberg report from last week noted that some gold dealers are currently offering sellers price premiums as high as 15 percent to part with their gold.
Such high premiums are extremely unusual in the gold market, but they speak to the unusual and uncertain times the world is currently facing. If the hedge buy pressure keeps up in general, a gold price of $1,750 could be in play in the coming months.
