Capitalization of 'Gold' Tokens Reaches a Record $4.2 Billion. What's Driving the Growth?
Capitalization of gold-backed tokens has reached a record $4.2 billion, driven by a surge in the price of physical gold, which itself surpassed $4,500 per ounce for the first time in history with a year-to-date gain exceeding 70%. This performance outpaced major asset classes, including Bitcoin and key stock indices.
The two dominant tokens, Tether's XAUT and Paxos' PAXG, account for nearly 90% of the sector's market cap, at $2.26 billion and $1.53 billion, respectively. Their market capitalization has grown two to three times since August, a rate that significantly outpaces the appreciation of gold itself, suggesting new demand and the issuance of additional tokens.
A smaller, emerging niche includes tokenized shares of gold-based Exchange-Traded Funds (ETFs), such as those from xStock and Ondo. While their market cap is only in the tens of millions, they represent a new avenue for crypto investors to gain blockchain-based exposure to gold-related equities. However, this market remains illiquid, with daily trading volumes of just a few million dollars.
The broader trend reflects a growing intersection of traditional finance and crypto, with platforms like Kraken and Bybit also offering tokenized traditional stocks. Despite the success of gold tokens, the wider crypto market has seen a downturn, with total capitalization falling below $3 trillion and Bitcoin's price declining approximately 7%.
RBK-crypto12/23 13:51
