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Gold-Backed Crypto Minting Volume Hits 3-Year High as Central Bank Buying Drops
A surge in demand, particularly from ETFs, pushed the average quarterly gold price to a record high.
May 3, 2025, 7:15 p.m.
What to know:
- Total gold demand reached its highest first-quarter level in nine years, driven by increased investment demand and bar and coin purchases.
- Gold ETFs saw a surge in investment, while gold-backed cryptocurrencies experienced a resurgence with a 77% increase in monthly transfer volume.
- Despite reaching a record average quarterly price, gold experienced a slight dip in the past week.
The gold market is seeing a shift in activity, with central bank buying slowing and demand from exchange-traded funds and gold-backed cryptocurrencies growing. The latter recently moved to a three-year high, as measured by the net minting volume for tokens backed by the precious metal.
Over $80 million worth of these tokens were minted over the past month, according to data from rwa.xyz. That boost helped push the sector’s market cap up 6% to $1.43 billion. Meanwhile, monthly transfer volume rose 77% to $1.27 billion, marking a sharp resurgence of interest in digital representations of the precious metal.
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The rise in token activity mirrors a broader trend in the gold market.
The World Gold Council’s latest report shows that total gold demand in the first quarter of the year reached 1,206 tonnes—a 1% year-over-year increase and the strongest first quarter since 2016. The surge came despite a slowdown in central bank purchases, which fell to 244 tonnes, down from 365 tonnes in the fourth quarter.
Gold ETFs played a central role in the shift. Investment demand has more than doubled to 552 tonnes, suggesting investors are moving into the precious metal, a move central banks are known for historically.
Those inflows helped push the average quarterly price of gold to a record $2,860 per ounce, up 38% from the previous year. Yet the price dipped 2.35% last week, after rising 23.5% year-to-date, while risk assets, including cryptocurrencies, rose. Spot gold is currently trading at $3,240.
While traditional gold demand, such as jewelry, saw a downturn—dropping to pandemic-era lows—bar and coin demand stayed elevated, especially in China.
Read more: Tokenized Gold Surges Above $2B Market Cap as Tariff Fears Spark Safe Haven Trade
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