Tether Gold (XAU₮) has become the number one gold-backed cryptocurrency by market cap after launching earlier this year.
The gold-backed cryptocurrency has reached a market capitalization above the $21 million mark, while its nearest rival, PAX Gold (PAXG), is at a market cap of $18 million. The cryptocurrency’s rise may have been added by the support it has received from Bitfinex, which launched margin trading for XAU₮ in late January.
Commenting on the development Paolo Ardoino, CTO at Tether, said in a press release shared with FortuneZ, “Tether Gold has had a really great start. I believe that this is nothing in comparison to the potential of this new asset, especially in the context of increased investor interest in risk diversification and capital safety against political uncertainty.”
Ardoino added that Tether Gold offer investors diversification when it comes to risk and volatility, and as such he expects to “reach a market capitalization of at least $100 million. As FortuneZ reported, Tether Gold was launched in early January, with each token representing “ownership of one troy fine ounce of physical gold on a specific gold bar” held in a Swiss vault.
XAU₮ tokens can be transferred to any address on the Ethereum blockchain and are currently also tradeable on non-custodial cryptocurrency trading platform DeversiFi. Allocated gold the cryptocurrency is “identifiable with a unique serial number, purity and weight,” and XAU₮ holders can verify the details of the gold bars associated with their holdings via the Tether Gold product page.
Demand for gold-backed cryptocurrencies has been growing over the last few months as concerns surrounding an economic slowdown grow among investors. Moreover, the coronavirus outbreak has affected global supply chains, leading to a market downturn that got the S&P 500 down 7.6% year-to-date.
As a result the price of gold has increased roughly 24% of the last 12 months as investors start looking for safe haven assets. One ounce of gold is currently trading for about $1,646.