According to data from CoinGecko, the market capitalization of tokenized gold assets surpassed $1 billion on Tuesday, as the price of gold neared its all-time high.
Tokenized gold is a type of stablecoin that is pegged to the price of gold. The tokens on the blockchain represent ownership of physical gold that is managed by the issuer, offering investors a way to gain exposure to the precious metal without the management fees associated with exchange-traded funds (ETFs) or the burden of storing physical gold bullions.
The two largest gold stablecoins are Pax Gold (PAXG) and Tether Gold (XAUT), issued by the New York-based fintech firm Paxos Trust Company and Tether, respectively.
According to CoinGecko data, the market cap of PAXG and XAUT at the time of publication was $518 million and $499 million, respectively.
The price of gold, a traditional safe-haven asset, has risen since March amid investor concerns about flailing banks and a possible government bailout, which would lead to expanding fiat money supply and currency devaluation.
On Tuesday, the metal was trading at $2,021 per ounce, just 3% off its all-time high recorded in August 2020.
Bitcoin (BTC), often referred to as digital gold due to its program-coded supply cap, has also rallied in price, reaching as high as $29,000 from $20,000 in tandem with gold’s surge.
BTC’s correlation with gold hit a multi-year high last week, surpassing equities, according to digital asset market research firm Kaiko.
The rise of tokenized gold assets reflects investors’ growing interest in alternative ways to invest in gold, particularly amid the economic uncertainty caused by the COVID-19 pandemic.
With the price of gold approaching its all-time high and the market capitalization of tokenized gold assets surpassing $1 billion, it is clear that investors are looking for new ways to gain exposure to the precious metal.
The convenience and accessibility of tokenized gold, combined with the stability and security of blockchain technology, make it an attractive option for investors looking to diversify their portfolios.
Tokenized Gold
In summary, the market capitalization of tokenized gold assets surpassed $1 billion on Tuesday, as the price of gold neared its all-time high. The rise of tokenized gold assets reflects investors’ growing interest in alternative ways to invest in gold, particularly amid the economic uncertainty caused by the COVID-19 pandemic. With the market for tokenized gold growing rapidly, it is clear that investors are looking for new and innovative ways to gain exposure to this safe-haven asset.