CryptocurrencyCryptocurrency ExchangesPrice Analysis

Tokenized Gold Market Enjoyed Relative Growth As Demand Pushes Premiums Demand

The year started with the culmination of gold attaining its all-time high surpassing the previous record of $2k per ounce. As a tokenized gold crypto asset by market cap, it has continued to experience significant growth.

A good example is Paxos Trust Trust, whose market valuation spiked above 43% in 30 days, climbing to its current value of $611 million from $424 million. 

Market Caps For PAXG and XAUT Surges, Tokenized Gold Premiums Takes Spot Market Value

The price of a troy ounce of .999 gold reaches $2,069 per unit on March 8, 2022. An ounce of troy is equivalent to 31.10 grams of pure gold. Following the rise in precious metal prices, the demand for tokenized gold assets jumped further.

More importantly, there is a premium attached to tokenized gold assets for quite some time, with tokens having a single troy ounce of .999 pure gold have seen a high spot market valuation over the physical market gold.

At the time of going to press, Tether’s XAUT is on the increase with a 2.18% premium rise compared to the current spot price of gold. Additionally, PAXG has a 0.26% premium in a time where both of the tokenized gold values have increased during the last couple of days.

Available data shows that PAXG, as of February 19, 2022, has a market valuation of $424 million. After a month, new metrics indicate the growth of PAXG market capitalization by more than 43%, equating a rise to $611 million.

On the other hand, the market valuation of XAUT rise to $486 million from $430 million in a month, which shows a rising percentage of more than 13%.

Analyzing The 30 Days of Growth

Considering the average price of gold per ounce in the past 30 days, which is $1,875, dividing the current market valuation ($611 million) by the same number indicates that the vaults at PAXG hold nearly 325,333 ounces of pure gold.

Alternatively, the same average can be used, and dividing it by the market cap of PAXG will also show that about 99,200 ounces of pure gold have been kept at its vaults since February.

As for Tether, the same mathematical application shows how 29,866 ounces of gold are added to the firm’s gold stash.

However, evaluating both projects indicates that almost 129,066 troy ounces containing .999 pure gold are used to back the tokenized gold crypto portfolio.

However, the 30-day average of the price of an ounce is different from the recorded amount of tokenized gold involved in both projects. As of the time of publication, the supply of PAXG tokens in circulation is 317,255, while that of XAUT is 246,524 tokens.

Each of the tokens mentioned above equals an ounce of one troy of .999 pure gold kept in the various vaults.

The data from CoinGecko.com shows a supply of 246,524 XAUT tokens in circulation, another data from Tether shows a different token in supply which is 226,289 XUAT.

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