Cache Gold Token (CGT) the Utility of Publicly Auditable Tokenized Assets and their Strategic Value for Investment and Wealth Preservation

For those who have enough capital at their disposal it is prudent to hold 25% of your wealth in currency, 25% in gold, silver and industrial assets, 25% in stocks and bonds, and 25% of your wealth in real estate. Then depending on what happens, buy or sell these different components of your portfolio in order to readjust back to those 25% levels and in effect you will be buying more of a sector when prices are low and selling off your profits  when a sector is high.

For example, when gold and silver are doing poorly stocks and bonds may be doing better. So you sell off some of your stocks and use the profit to buy more gold and silver until the right ratios are rebalanced. If your cash is above 25% and your other investments have done poorly, then use your excess cash to buy the other elements until your portfolio is rebalanced. Overtime your overall net worth should increase.

For those who may be younger, or are investing with smaller amounts of capital, speculating and taking risks is more worthwhile as it takes sufficient capital in order for diversification in investments to really pay off in any significant way within a 5 or 10 year window. Simply holding wealth in low volatility investments is not without risks overtime: there is general market collapse, boom and bust cycles, depressions, inflation etc...so wealth depletion is a risk that increases over time no matter how diversified you are. Speculation, therefore, is sensible for those wishing to increase the principle of a smaller portfolio quickly, since “safer” returns aren’t yet enough to improve your financial position in any significant way.

But what of those who have moderate amounts of capital and wish to find a balance between the more speculative, leveraged strategy with the more diversified and lower volatility strategy?

Under current inflationary environments and with universal currency debasement becoming a growing problem digital assets such as CGT (Cache Gold Token) provide portfolio exposure to the safe haven anti-inflationary qualities of gold, while providing all the liquidity you would typically expect from fiat notes.

Each CGT is the equivalent of the spot price of 1 ounce of gold and is freely traded through the etherium blockchain. The upfront cost is around 1.5% to deposit your gold in one of several vaults and receive your CGT digital wallet. You may take delivery of your CGT in physical gold from any authorized vault around the world. You can also trade CGT for bitcoin or any other crypto and easily convert to currency. Beyond the initial fee there are no maintenance fees and every CGT is publicly auditable through a real time computerized system with pictures and serial numbers you can access at any time via the CGT website. This website is updated frequently and shows which physical ounces are backing which CGT coins. The vaults are also audited by third parties twice per year to ensure authenticity; gold is tested for purity using three separate techniques to determine the number of actual gold ounces for each bar or coin deposited.

If you look at the percentage of increase that gold has achieved overtime, it has not only far exceeded the returns of bonds and other safe haven and inflation hedging assets, but you would have outperformed Berkshire Hathaway simply by holding gold. Eventually there will be other publicly auditable tokenized assets available on the blockchain besides CGT, for silver, platinum, and eventually any asset you can think of.

Given the current inflationary environment investors can choose to avoid unnecessary exposure to debased fiat currencies and buy digital tokens such as CGT. Rather than watching your savings diminish overtime, you can hold CGT securely on the blockchain and whenever you need liquidity or fiat notes, easily convert your coin into whatever currency you choose. 

When speculating and taking risks with your principle, such as making margin-backed investments, you can keep a portion of your speculative capital in CGT or other asset-based tokens. You can still receive returns from your tokens due to your exposure to hard assets such as gold and silver, but keep emergency liquidity so that if your stock investments do go down you can quickly liquidate a portion of your speculative portfolio in CGT in order to prevent margin call or average down on your stocks. 

This strategy is particularly effective if you use your token as a direct hedge to your stock portfolio. If you are investing in mid-cap tech companies, for example, these stocks will tend to perform inversely to gold, so if your stock position performs poorly you can sell off your profits from CGT and buy more tech stock at a lower price, or simply use the capital to prevent any forced selling due to margin maintenance.

If I want to invest $155,000 in stock, rather than invest the entire amount in equities, you can take $55,000 and invest in a 1 kilo bar of gold redeemable for 32.15 (CGT). Then you can keep a $100,000 principle in your trading account and leverage that into the $155,000 original amount with credit from your brokerage. CGT should perform well over time in relation to your equities without minimizing the returns of your speculative purchasing power as it would if you simply held fiat notes in reserve.

CGT allows exposure to the wealth preserving and anti-inflationary aspects of gold, while providing liquidity that allows a great deal of flexibility in how you deploy your capital and readjust your portfolio. As asset-based crypto currencies expand beyond gold and silver, the possible utility of these tokens will be nearly limitless. 

With exponentially increasing deficits and increasing money velocity, the current economic environment should become increasingly inflationary. This may very well be the beginning of what many investors believe will be a multi-year commodities supercycle. Asset-based crypto currencies will perform well overtime and will be far superior to the fiat based paper and digital currencies of the central banking system.