Share this article
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.
Make us preferred on Google
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 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.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
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.
More For You
'We do not do illegal things': Inside a U.S.-sanctioned stablecoin issuer's race to build a crypto giant
Oleg Ogienko, the public face of A7A5, pitched the ruble-pegged stablecoin as a fast-growing trade rail built to move money across borders despite sanctions pressure.
What to know:
- Oleg Ogienko, the public face of ruble-denominated stablecoin issuer A7A5, insists the firm complies fully with Kyrgyz regulations and international anti-money-laundering standards despite extensive U.S. sanctions on its affiliates.
- A7A5, whose issuing entities and reserve bank are sanctioned by the U.S. Treasury, has grown faster than USDT and USDC and aims to handle more than 20 percent of Russia’s trade settlements, primarily serving businesses in Asia, Africa and South America trading with Russian partners.
- Ogienko said that he and his team were developing partnerships with blockchain platforms and exchanges during Consensus in Hong Kong, though declined to name specifics.
Top Stories
