The market capitalization of tokenized gold assets has crossed the $1 billion milestone, coinciding with the near-record high price of gold.
Tokenized gold, a form of stablecoin, mirrors the price of gold. It also allows investors to own physical gold through blockchain tokens without the expenses of an exchange-traded fund (ETF) or having to store gold bars.
Pax Gold (CRYPTO: PAXG), issued by New York-based fintech firm Paxos Trust Company, and Tether Gold (CRYPTO: XAUT), created by Tether (CRYPTO: USDT), the company behind the $80 billion stablecoin USDT, are the two dominant gold stablecoins.
According to CoinGecko data, PAXG and XAUT have market caps of $518 million and $499 million, respectively.
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The price of gold, a traditional safe-haven asset, increased since March when banks were shuttered.
On Tuesday, gold traded at $2,021 per ounce, just 3% below its all-time high reached in August 2020.
Bitcoin (CRYPTO: BTC), frequently referred to as "digital gold" due to its supply cap, has also experienced a surge, climbing from $20,000 to $29,000 alongside gold's rise.
BTC's correlation with gold reached a multi-year high last week, surpassing equities, as revealed by digital asset market research firm Kaiko on Monday.
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