Gold's Digital Makeover: From Ancient Treasure To Billion-Dollar Crypto Phenomenon

The market capitalization of tokenized gold assets has crossed the $1 billion milestone, coinciding with the near-record high price of gold.

Tokenized gold, a form of stablecoin, mirrors the price of gold. It also allows investors to own physical gold through blockchain tokens without the expenses of an exchange-traded fund (ETF) or having to store gold bars.

Pax Gold PAXG/USD, issued by New York-based fintech firm Paxos Trust Company, and Tether Gold XAUT/USD, created by Tether USDT/USD, the company behind the $80 billion stablecoin USDT, are the two dominant gold stablecoins.

According to CoinGecko data, PAXG and XAUT have market caps of $518 million and $499 million, respectively.

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The price of gold, a traditional safe-haven asset, increased since March when banks were shuttered.

On Tuesday, gold traded at $2,021 per ounce, just 3% below its all-time high reached in August 2020.

Bitcoin BTC/USD, frequently referred to as "digital gold" due to its supply cap, has also experienced a surge, climbing from $20,000 to $29,000 alongside gold's rise.

BTC's correlation with gold reached a multi-year high last week, surpassing equities, as revealed by digital asset market research firm Kaiko on Monday.

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