Gold meets crypto in new ‘looping’ trade that’s delivering 22% returns – DL News
- Longtime DeFi trade is being applied to gold.
- Looping lets investors leverage precious metal.
- Gold is white hot amid market turmoil.
Looping has been a hot trade in DeFi for some time. Now investors are keen on applying the move in a new market — gold.
In a looping trade, an investor uses one asset to back a loan made with another asset. The stratagem is a way to leverage a position and multiply potential gains.
Investors are now utilising gold as collateral for loans denominated in USDC, according to Swarm, a Berlin-based crypto trading platform that specialises in tokenised real-world assets, or RWAs.
Then they can invest the dollar-backed stablecoin in whatever they wish, including more gold.
By looping gold, investors have bagged gains…
