Gold-Pegged Cryptos Gain Momentum as Precious Metal Hits Record Amid Economic Turmoil
Gold-backed cryptocurrencies are rallying alongside physical gold, which has surged 9.7% this year to a record high of $2,880 per ounce. The ongoing trade tensions between the U.S. and China, along with increased investor appetite for safe-haven assets, have fueled the metal’s strong performance.
As a result, digital gold assets such as PAX Gold (PAXG) and Tether Gold (XAUT) have posted similar gains, each rising about 10% in value. These tokens, pegged 1:1 to physical gold stored in vaults, provide investors with blockchain-based exposure to the precious metal without the need for direct ownership or storage.
Traditional markets are also seeing a gold rush, with the VanEck Gold Miners ETF (GDX) soaring nearly 20% this year, significantly outpacing the broader stock market. On the blockchain, gold-backed token issuance is accelerating, with data from RWA.xyz showing a 53.7% monthly increase in transfer volumes, indicating growing investor demand.
Several macroeconomic factors are driving gold’s rise, including renewed tariff threats between the U.S. and China, increasing Chinese gold demand, and a broader trend of central banks stockpiling the asset. The World Gold Council reported that global gold demand reached 4,945.9 tons last year, valued at around $460 billion.
In contrast, major cryptocurrencies have struggled. Bitcoin (BTC) has posted a modest 3.6% gain, bringing the bitcoin-to-gold ratio to a three-month low. Ether (ETH) has dropped 17.6%, and the CoinDesk 20 Index remains largely flat, up just 0.5% year-to-date.
Despite this, some market experts believe bitcoin will soon catch up. “Right now, gold is benefiting from economic uncertainty, but this isn’t the end of the ‘digital gold’ thesis,” said Mike Cahill, a core contributor to the Pyth Network. “Once market conditions shift and investors rotate back into riskier assets, bitcoin could see a significant breakout.”
Cahill also noted that bitcoin remains one of the strongest store-of-value assets in the market. “With growing regulatory support under Trump’s administration, BTC is well-positioned to benefit once institutional investors return,” he added.
