At a time when the crypto-asset market is paralyzed by war and inflation, this market is witnessing the emergence of a new class of crypto-assets that is feeding on risk.
These gold-backed currencies are a newer version of "stable currencies" that are usually pegged to the dollar to reduce volatility.
In 2022, Pax Gold, the largest of these coins, made a 7.4 percent jump, while its major competitor, Tiger Gold, jumped 8.5 percent. By contrast, Bitcoin lost more than 13 percent and Ether fell 20 percent.
Everett Millman, senior market analyst at Gainesville Queens, told Reuters, "One of the main concerns of many newcomers to crypto assets is that they are not backed by anything. They only appear on screen...so linking them or making them relate to a commodity in The real world makes sense."
the demand for gold is not surprising, as it is a traditional way to hedge against geopolitical turmoil and inflation, but the demand for gold-backed cryptocurrencies is new.
stablecoins are a fast-growing class of crypto assets that have emerged as a common medium of transactions, often used by dealers seeking to move funds. it is easier to exchange major stablecoins for bitcoin or other cryptocurrencies for example than to exchange traditional money like dollars for bitcoins.
However, gold-backed currencies are still emerging assets that attract only a small segment of the crypto-asset market today, with Pax Gold and Tether Gold barely more than two years old, with little liquidity and little certainty about their long-term prospects. the long.
Pax Gold's market value nearly doubled to $627 million this year, and Tiger Gold's market value rose nine percent to more than $209 million.