The combined market capitalization of tokenized gold assets surpassed $1 billion on Tuesday (04.05), according to CoinGecko. This coincided with the price of gold approaching an all-time high. Tokenized gold or gold token is a type of stablecoin whose price is pegged not to a fiat currency, but to gold. So the tokens available on the blockchain represent ownership of the physical gold managed by the issuer.
Along with the price of tokenized gold, the price of bitcoin also rises
A big advantage of this kind of investment is that you don’t have to own gold bars on the one hand, and you don’t have to pay fees for an exchange-traded fund on the other. The two largest such gold stablecoins are Pax Gold (PAXG), issued by Paxos Trust Company of New York, and Tether Gold (XAUT), which is a token of Tether. A CoinGecko according to your data the combined market capitalization of the two tokens exceeded $1 billion earlier this week. The main reason for this increase can be attributed to the increase in the price of gold. Investors are once once more fleeing to gold as concerns regarding banks have continued since March.
The danger of potential bank failures is also accompanied by the fear that a bank that is close to bankruptcy will be bailed out by the government, which will be financed by printing fiat money, which then leads to further devaluation. The price of gold is at incredible heights right now, asking $2,032 for an ounce of gold at the time of writing.. The highest price ever was in 2020, when they asked for $2,069 for an ounce. By the way, bitcoin’s exchange rate fluctuated hand in hand with gold in March, and now the next level that investors are aiming for is $30,000.
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