Gold-Backed Cryptocurrencies Surge 40% Amid Global Trade Uncertainty

Gold-backed cryptocurrencies have surged in value amidst escalating global trade uncertainty. Tether Gold (XAUT) and Paxos Gold (PAXG) reached all-time highs on April 22, with Tether Gold touching $3,529 and Paxos Gold recording a peak of $3,520. Two other gold-backed cryptocurrencies, Quorium (QGOLD) and Kinesis Gold (KAU), have seen rises of 8.5% and 7.6%, respectively, in the past 30 days. All four tokens are up 40% or more in the past 12 months.

The increased demand for gold-backed cryptocurrencies is driven by macroeconomic factors, including escalating global economic uncertainty, geopolitical conflicts, and a rising demand for inflation-resistant assets. Since US President Trump’s renewed trade war, gold has increased significantly in value. On April 2, the price of one ounce of gold was $3,115. At the time of this writing, on April 28, the ounce price is at $3,335, representing a 7% jump in less than 30 days. Gold, often seen as a hedge against inflation, usually attracts investors during times of economic uncertainty. In similar lines, Bitcoin (BTC), often referred to as “digital gold,” has soared 14% during the same period.

Real-world asset (RWA) tokenization, which brings assets like precious metals, bonds, and real estate onto the blockchain, is a growing market. The tokenized RWA market capitalization stands at $21.6 billion, up 8.6% over the past 30 days. Tether Gold and Paxos Gold are examples of RWA tokenization. Each coin in both products is reportedly backed by one troy ounce of actual gold. Tether is said to store its gold reserves in Switzerland, while Paxos keeps its gold in London. Tokenized gold has been a strong crypto use case in 2025, reaching a two-year high in trading volume on April 10.

Tokenizing gold has several advantages over more common investment instruments that provide exposure to gold. For instance, settlements through these funds are instant, enabling quick trading. In addition, some tokenized gold tokens can be used to purchase goods and services, while traditional instruments can usually be redeemed only for fiat currency.

The recent surge in gold-backed cryptocurrencies coincides with significant movements in the global financial markets. US Treasury funds have seen substantial inflows, with $19 billion in net inflows recorded, the highest since March 2023. This influx is driven by a 30 basis point drop in the 30-year US Treasury yield, indicating a rise in bond prices as investors prioritize safety over returns. However, foreign central banks have reduced their holdings of US Treasurys to 23% of US government debt, a 22-year low, suggesting a pivot towards other assets, potentially including gold.

Gold's share of global reserves has surged to 18%, the highest level in 26 years, with China doubling its gold reserves to 7.1% since 2023. This trend mirrors a pattern observed during the 2020 pandemic, when Bitcoin soared from $9,000 to nearly $60,000 as gold's share of global reserves increased by 14.5% in 18 months. The current environment, characterized by a stabilizing bond market and a central bank's gold rush, suggests a similar trigger for Bitcoin's next bullish move. In 2023, when US Treasury yields rose amid recession fears, Bitcoin gained 47% in a month while the Nasdaq dropped 8.7%. With yields easing and central banks signaling a lack of faith in the US dollar, Bitcoin's appeal as a global store of value improves.

Tether, a prominent player in the gold-backed cryptocurrency space, has released its first formal attestation for XAU₮, confirming over 7.7 tons of LBMA gold backing 246,523.33 tokens secured in Swiss vaults. This move underscores the growing demand for transparency and security in the gold-backed cryptocurrency market, as investors seek assurances that their assets are backed by physical gold.

The surge in gold-backed cryptocurrencies is also driven by escalating global economic uncertainty and heightened geopolitical tensions. Investors are increasingly turning to inflation-hedging assets, and gold-backed cryptocurrencies offer a unique blend of the stability of gold with the technological advantages of cryptocurrencies. This trend is likely to continue as long as global trade uncertainty persists, making gold-backed cryptocurrencies an attractive option for risk-averse investors.

In summary, the spike in gold-backed cryptocurrencies is a direct response to global trade uncertainty and the search for safe-haven assets. The trend is supported by significant movements in the global financial markets, including substantial inflows into US Treasurys and a pivot by foreign central banks towards gold. As investors continue to seek stability and security, gold-backed cryptocurrencies are poised to remain a popular choice, offering a unique combination of traditional safe-haven assets and modern financial technology.