Tokenized gold assets have exceeded $1 billion in overall market capitalization as the price of gold surpassed $2,000
According to data from crypto price tracker CoinGecko, tokenized gold assets have now surpassed $1 billion in total market capitalization as gold’s price crossed the $2,000 mark. Tokenized gold represents a type of stablecoin that aligns its value with gold, while the tokens on the blockchain signify ownership of physical gold which is managed by the issuer. This allows investors to gain exposure to the precious metal without incurring the management fees tied to exchange-traded funds or dealing with the hassle of storing gold bullion. The leading gold-backed stablecoins are Pax Gold (PAXG), issued by the New York-based fintech firm Paxos Trust Company, and Tether Gold (XAUT), issued by Tether, the entity responsible for the $80 billion-stablecoin USDT.
As of the time of writing, the market capitalizations for PAXG and XAUT stand at $518 million and $499 million, respectively, according to CoinGecko data. The price of gold, known as a reliable safe-haven asset, has increased since March amid investor worries regarding struggling banks and possible government bailouts, which could lead to the expansion of the fiat money supply and currency devaluation. On Tuesday, gold was trading at $2,021 per ounce, only about 3% below its all-time high observed in August 2020.
Bitcoin (BTC), often referred to as digital gold due to its programmed supply limit, has jumped from $20,000 to as high as $29,000 alongside gold’s upward movement. BTC’s correlation with gold recently reached a multi-year peak, surpassing that of equities, as reported by digital asset market research firm Kaiko on Monday.
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