The rise in gold prices has been attributed to mounting speculation about the United States Federal Reserve’s future policy following the release of jobs data.
The total market capitalization of tokenized gold has surpassed $1 billion. CoinGecko data places it at $1.02 billion, up 2.3% over the past 24 hours, with a trading volume of $35,508,696 over the same period.
The largest gainers are PAX Gold and Tether Gold with gains of 2.7% and 1.9% respectively. Both are currently trading over $2,000, with PAX Gold at $2,036 and Tether Gold at $2,026. PAX Gold’s market cap stands at almost $523 million, as Tether Gold trails with close to $499 million. Perth Mint Gold Token comes in third place with a market cap of $2.46 million.
This is not the first time tokenized gold’s market cap has topped the $1 billion mark. Last year, the tokens’ market was well above $1 billion for a portion of last year before falling off in August.
The Block’s CEO Larry Cermak comments:
“$1 billion is still relatively little. The likeliest reason is that some crypto whales prefer to hedge their crypto exposure with gold, and use these tokens instead of storing gold bars in their safes.”
This change comes as investors find a safe-haven asset in gold amid the looming banking crisis. The general digital asset market has benefited from increased investor attention, with the top currency, Bitcoin currently trading above $28,500 according to CoinMarketCap data.
“The simplicity of crypto as digital bearer assets solves for the immediate counter-party risks that bank customers are dealing with, but customers also require stability of value,” Bernstein’s Gautam Chhugani said.
The price increase comes as the price of the underlying asset, gold, surges to a 13-month high of over $2,025 per ounce as the prices of industrial metals such as copper and iron ore continue to drop. The last time the precious metal reached such heights was in February 2022. Gold closed Tuesday at $2,020 while silver closed at $25 per ounce, up a dollar over 24 hours.
The rise in gold prices has been attributed to mounting speculation about the United States Federal Reserve’s future policy following the release of jobs data. Job openings in February fell to a nearly two-year low of 1.7 job openings per person, down from 1.9 in January. A lower number is indicative of the Fed’s success in managing inflation and suggests that the central bank might stop hiking rates. While this data has had a positive effect on gold, the opposite is true for the US dollar.
Mercy Mutanya is a Tech enthusiast, Digital Marketer, Writer and IT Business Management Student.
She enjoys reading, writing, doing crosswords and binge-watching her favourite TV series.
