As traditional gold markets experience a surge, cryptocurrency investors are increasingly turning to tokenized versions of the precious metal, drawn by their ability to offer both price exposure and digital flexibility.
Gold-backed cryptocurrencies like Paxos Gold (PAXG) and Tether Gold (XAUT) have risen 24.15% and 23.7%, respectively, year-to-date, reaching new all-time highs above $3,300—mirroring the performance of spot gold. Since then, their prices have slightly retreated, with PAXG trading at $3,265 and XAUT at $3,244.
While gold-backed cryptocurrencies have surged, the broader cryptocurrency market has faced a downturn. Bitcoin (BTC) has dropped more than 11% so far this year, and the wider crypto market, as measured by the CoinDesk 20 (CD20) index, has fallen by over 30%.
These gold-backed tokens, which are fully backed by physical gold and designed to track its price, have seen increased demand as investors sought a stable haven amid growing global uncertainties, particularly the escalating U.S.-China trade tensions.
This uptick in demand for gold-backed assets mirrors a broader trend in the market, with gold ETFs experiencing inflows of 226.5 tonnes in Q1 2025—the highest level since early 2022, according to data from the World Gold Council. Notably, nearly 60% of these inflows originated from North America.
In the same period, gold-backed cryptocurrencies saw more than $42.7 million in net token minting, according to RWA.xyz data, pushing their total market capitalization to nearly $1.4 billion, further fueling the price appreciation of gold itself.
