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

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

This cautious approach is often reflected in investment strategies. Today, most investors are adopting a more cautious, conservative stance, opting for investment instruments and options that promise reliable returns with minimal risks. This safety bias reflects people’s desire to achieve strong returns on their investment while preserving their hard-earned capital.

Crypto is not immune to these perceptions. Despite the potential for high returns, many view crypto as risky due to volatility and uncertainties around regulation and security. 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 are not always the most accessible to everyone. The difference between accessibility and security 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, such as gold. Historically, gold has maintained its value during periods of economic instability, political turmoil, and economic volatility because 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 up to $200 million worth of gold bars per month.

Despite its reputation as a safe haven, however, investing in gold isn’t easy. Whether it’s bullion, coins, or jewelry, physical gold requires a significant initial investment. Recent reports suggest that an average gold bar weighs around 400 troy ounces and costs around $1 million. The costs associated with storing and insuring physical gold can be a deterrent to investors unless you plan on burying your gold bars in your backyard.

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

This is why tokenized real-world assets have such high appeal, as they have the potential to attract security-focused individuals looking for more robust investments in crypto. Sure, there has been a lot of debate around its use for real estate or fine art, but precious metals are one of the easiest applications to get investors on board with.

However, purchasing tokenized gold is mostly limited to financial giants like HSBC, who have their own “Gold Tokens” that many retail investors are unlikely to get their hands on. Regular investors looking to explore tokenized gold deserve a way to do so at their own pace.

FreeBnk, for example, is a blockchain-based fintech company that helps bridge the gap between traditional and digital finance. The app, which already offers tokenized real estate services, recently opened up opportunities for its users to invest in tokenized gold.

Users can now invest fractionally into these digitized assets through the app, allowing them to contribute any amount they want to the asset. This essentially opens the door to more democratic gold investing, as customers can invest in a variety of blue-chip assets without having to take out a second mortgage or get a PhD in token economics to get involved.

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