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Gold-Backed Cryptocurrencies Surge as Precious Metal Hits Record Amid Trade War Worry
The precious metal has rallied nearly 10% so far this year while most top cryptocurrencies struggled to stay in the green.
Updated Feb 5, 2025, 4:42 p.m. Published Feb 5, 2025, 4:41 p.m.
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What to know:
- Gold-backed cryptocurrencies are outperforming the wider market amid a surge in the precious metal's price.
- The rise saw activity surrounding these tokens surge significantly, though their adoption is still far behind that of stablecoins.
Gold-backed cryptocurrencies are outperforming the wider market amid a historic rally for the precious metal, which is up around 9.7% so far this year to a new record of $2,880 per ounce amid growing trade war tensions.
and Tether gold (XAUT) have benefitted greatly from the precious metal’s rise, both rising roughly 10% in line with the spot price of gold. Each of these tokens is backed by one troy ounce of gold stored in a vault.
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Unsurprisingly, in the traditional market, gold miners' stocks have also surged. VanEck Gold Miners ETF (GDX), an exchange-traded fund (ETF) that tracks gold miners, has risen nearly 20% this year, outperforming the S&P 500.
The price action has seen the supply of these tokens grow, with token mints outpacing burns by millions of dollars weekly. Transfer volumes for gold-backed cryptocurrencies, according to RWA.xyz data, have meanwhile surged more than 53.7% month over month.
Gold’s price has risen this year over tariff threats from both the U.S. and China, the Spring Festival holidays in the latter country and a broader trend of growing demand. Last year, demand for the precious metal hit 4,945.9 tons, worth around $460 billion, according to the World Gold Council.
Meanwhile, most major cryptocurrencies have struggled so far this year. Bitcoin saw a modest 3.6% rise, leading the bitcoin-gold ratio to a 12-week low, while ether is down more than 17.6%. The CoinDesk 20 index is up just around 0.5%.
“Gold’s rally and bitcoin’s dip aren’t a failure of the 'digital gold' narrative — they’re a setup,” Mike Cahill, core contributor to the Pyth Network, told CoinDesk in a written statement. “Right now, trade war fears and a strong dollar are fleeing a flight to traditional safe havens, but once liquidity returns and risk appetite rebounds, bitcoin could catch up in a big way.”
“Smart investors know BTC is still the hardest asset next to gold, and when Trump’s pro-crypto stance materializes into actual policy, bitcoin stands to benefit massively,” he said.
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Abu Dhabi wealth funds bitcoin ETF holdings topped $1 billion at end of 2025
Both Mubadala Investment Company and Al Warda Investments lifted investments in BlackRock's iShares Bitcoin ETF (IBIT) in the fourth quarter.
What to know:
- Two major Abu Dhabi investment firms, Mubadala Investment Company and Al Warda Investments, increased their holdings of BlackRock’s iShares Bitcoin Trust (IBIT) in the fourth quarter of 2025 as bitcoin’s price fell.
- Mubadala lifted its IBIT stake to 12.7 million shares and Al Warda to 8.2 million shares.
- Together, they held a combined position that exceeded $1 billion at the end of 2025 but has since declined to just over $800 million amid further bitcoin losses in 2026.
