Gold-Backed Crypto Surges to 3-Year High as $80M Minted in a Month, Outpacing Central Bank Demand

Demand for gold is taking a new turn this year—away from central banks and toward tokenized digital assets. Data from April shows that gold-backed cryptocurrencies have surged to their highest issuance level in three years, reflecting a noticeable change in investor preferences.

According to recent figures from rwa.xyz, over $80 million worth of tokenized gold assets were minted in the last 30 days. That growth pushed the total market capitalization for these blockchain-based gold assets to $1.43 billion, marking a 6% month-over-month increase. Transfer volumes also jumped significantly, reaching $1.27 billion in April—a 77% rise compared to the previous month. This signals increased usage and liquidity for these tokens.

These assets, often issued by platforms like Paxos (PAXG), Tether Gold (XAUT), and others, are pegged to real gold stored in vaults, offering investors a modern alternative to traditional physical gold ownership.

Central Banks Reduce Purchases While ETFs and Digital Assets Expand

The World Gold Council’s Q1 2025 Gold Demand Trends report revealed that global gold demand rose to 1,206 tonnes, up 1% year-over-year, making it the strongest first quarter since 2016. However, the makeup of that demand has shifted notably.

Central bank purchases dropped to 244 tonnes, compared to 365 tonnes in Q4 2024. This marks a 33% quarterly decrease in institutional buying. While central banks remain net buyers overall, the pace of accumulation has slowed.

At the same time, gold exchange-traded funds (ETFs) saw strong inflows. Investment demand surged to 552 tonnes, more than doubling compared to the prior quarter. These inflows are helping maintain upward pressure on gold prices even as central bank activity cools.

Gold Prices Remain Elevated Despite Short-Term Dip

Prices for gold have continued to perform strongly in 2025. The average quarterly price rose to $2,860 per ounce, representing a 38% year-over-year increase. Despite a minor pullback of 2.35% last week, spot gold remains high, trading around $3,240 per ounce.

This pricing strength has been supported by both traditional demand and growing interest in tokenized forms of gold. As geopolitical and economic uncertainties persist—especially in relation to inflation, U.S. interest rates, and geopolitical tensions—investors are seeking stable, value-retaining assets.

Jewelry Sales Decline, While Retail Investment Stays Resilient

Not all segments of the gold market are growing. Jewelry demand fell to pandemic-era lows, particularly in Western markets, where discretionary spending has declined due to persistent inflation and rising costs of living. However, bar and coin demand remained relatively stable.

China, in particular, saw strong demand from retail investors seeking physical gold, even as institutional trends lean more digital. High domestic savings rates and concerns about the local economy continue to drive Chinese investors toward gold.

Tokenized Gold Emerges as a Serious Alternative

Tokenized gold isn’t just a niche corner of the crypto space anymore. It’s quickly gaining recognition as a legitimate form of gold investment—combining the trust of physical asset backing with the speed, transparency, and accessibility of blockchain technology.

These digital tokens allow for fractional ownership, 24/7 trading, and faster settlement compared to traditional gold investments. With growing minting volumes and rising market capitalization, tokenized gold may be poised to become a larger player in both the crypto and precious metals sectors.

The growing appeal of these assets may be especially attractive to investors who want gold exposure but without dealing with vault storage, shipping logistics, or ETF management fees.

Also Read: Coinbase Adds Fee-Free Access to PayPal’s PYUSD Stablecoin — Could It Challenge USDC and Tether?