Tokenized Gold Surpasses $1 Bn In Market Cap
By Kapil Rajyaguru
Tokenized gold assets surpassed $1 billion in combined market capitalization on Tuesday, according to data by crypto price tracker CoinGecko, as gold’s price neared its all-time high.
Tokenized gold is a type of stablecoin that pegs its price to gold, while the tokens on the blockchain represent ownership of physical gold managed by the issuer. It offers investors a way to get exposure to the precious metal without the management fees of an exchange-traded fund (ETF) or the burden of storing gold bullions.
The two largest gold stablecoins – by far – are pax gold (PAXG), issued by the New York-based fintech firm Paxos Trust Company, and tether gold (XAUT), issued by Tether, the same company behind the $80 billion-pegged stablecoin USDT.
As of now , the market cap of PAXG and XAUT is $518 million and $499 million, respectively, per CoinGecko data.
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.
Apart from private players like Paxos and Tether, now government is also showing interest in the gold backed digital currency.
Bitcoin (BTC), which is often called digital gold due its program-coded supply cap, has rallied to as high as $30,000 from $20,000 in tandem with gold’s surge. BTC’s correlation with gold hit a multi-year high last week, surpassing equities, digital asset market research firm Kaiko reported Monday.
Well, if you are not keen on buying physical gold but still want to take exposure in digital format, gold backed stablecoin is a promising option, that’s a word coming from experts.
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