7月 27, 2020
Various gold-backed stablecoins appear to be moving towards new record highs as the price of their underlying asset has hit its most significant levels since September of 2011. At the time of writing, an ounce of gold was worth around 1936 USD, up from 1771 USD the previous month. Gold futures contracts were likewise bullish; information from Investing.com showed that gold futures contracts were trading at 1929 USD.
Likewise, Pax Gold (PAXG) had climbed to 1,930 USD, up from 1,770 USD the previous month; Tether Gold (XAUT) had also risen to 1,907 USD from 1,760 USD. The Perth Mint Gold Token (PMGT) also saw an increase to 1945 USD from 1,643 USD. Every one of these assets is backed by an ounce of physical gold kept in various locations around the globe.
Additionally, the Digix Gold Token (DGX), represents 1 gram of physical gold, up from 56 USD to 61 USD.
In line with the price of gold’s increase, each asset saw an increase in its market value.
While the price of every one of these gold tokens has increased, not every one of them saw an increase in demand from their users: Tether Gold and Digix Gold Token both saw spikes in their trading volume during July; however, Tether Gold appears to be profiting the most from gold’s recent rally.
It was reported that a representative of Tether told Finance Magnates in an email that Tether is currently experiencing a 60x increase in the 24hr trading volume of Tether Gold this month.
We’ve seen an increased interest in gold and gold-backed stablecoins since the beginning of the Coronavirus pandemic.
The price of gold seems to have been supported as more and more investors are turning to the safe-haven asset in the face of continuing pandemic-related financial fallout as well as ongoing geopolitical tensions, especially between the United States and China.
The increased interest in gold-backed stablecoins seems to be supported by the increased understanding of the accessibility benefits they have: gold stablecoins usually offer access to gold without storage fees or other additional expenses.
The chief technical officer at Tether Paolo Arduino said that “while no one could, of course, have anticipated the severe challenges that we’ve all had to adapt to in 2020, it is clear that in times of uncertainty people like having accessibility to gold,” and this might be supporting the appeal of Tether Gold, as well as other gold-backed stablecoins.
The Increased interest in gold stablecoins started to appear in March, shortly following the global pandemic outbreak which saw it unleash havoc on society and the economy.
This trend seems to be continuing as the pandemic continues to strain the global markets.
Fundamental Analyst for Global Markets
James has over 20 years of experience trading FX, cryptocurrencies and investments products for a range of investment banks and brokers
He spent the last 10 years analyzing and writing about foreign exchange, crypto-currencies and the global financial markets
He has also spoken at a range of conferences around the globe on various financial topics.