As bitcoin loses some of its luster as “digital gold,” some cryptocurrency investors are apparently seeing value in tokens backed by the physical version of the yellow metal.
According to data compiled by Arcane Research, the total market capitalization of gold-backed tokens has grown 30-fold since the start of 2020, reflecting a surge in demand.
In particular, pax gold (PAXG), a token launched in September 2019 by the New York-based stablecoin issuer Paxos under the Ethereum blockchain’s ERC-20 standard, has seen steep growth in recent months. Its market capitalization has surpassed that of tether gold (XAUT), another gold-backed cryptocurrency from Tether, the dominant stablecoin issuer.
Tether gold made its debut in January 2020, and the two gold-backed stablecoins were in a close race until May – around the time when pax gold was listed on India-based exchange Wazirx, which is a unit of the giant cryptocurrency exchange Binance.