As gold prices continue to rise, crypto investors are increasingly flocking to gold-backed cryptocurrencies such as Paxos Gold (PAXG) and Tether Gold (XAUT), which offer a combination of exposure to gold’s price movements and the flexibility of digital assets.

Year-to-date, both PAXG and XAUT have surged by 24.15% and 23.7%, respectively, hitting new all-time highs above $3,300, closely mirroring the performance of spot gold. However, both tokens have seen a slight pullback, with PAXG now trading at $3,265 and XAUT at $3,244.

While gold-backed cryptocurrencies have flourished, the broader cryptocurrency market has faced challenges. Bitcoin (BTC) has dropped more than 11% this year, and the broader crypto market, according to the CoinDesk 20 (CD20) index, has seen a decline of over 30%.

This growth in gold-backed tokens comes as investors seek safety in traditional stores of value amid global economic uncertainty, notably the intensifying U.S.-China trade tensions. Gold ETFs have experienced their strongest inflows in over a year, with 226.5 tonnes added in Q1 2025—the highest since early 2022. Nearly 60% of this demand came from North America, according to the World Gold Council.

In a similar vein, gold-backed cryptocurrencies saw $42.7 million in net token minting during the first quarter, helping push their market capitalization to nearly $1.4 billion, which in turn contributed to gold’s price appreciation.