While gold tapped an all-time high (ATH) this year surpassing $2K per ounce, the top tokenized gold crypto assets by market valuation continue to see significant demand, premiums, and market capitalization growth. For instance, Paxos Trust Company’s PAXG market cap jumped more than 43% in 31 days from $424 million to today’s $611 million.
PAXG and XAUT Market Caps Swell, Both Gold Tokens See Premiums Over Gold’s Spot Market Value
On March 8, 2022, the price of one troy ounce of .999 fine gold reached an ATH at $2,069 per unit. A troy ounce is equivalent to 480 grains or roughly 31.10 grams of gold that is considered almost pure. As the price of the physical bullion has risen, demand for tokenized gold crypto assets has increased a great deal. Additionally, tokenized gold assets have been carrying a premium in recent times, as tokens that represent one troy ounce of .999 fine gold have seen higher spot market prices than the physical bullion market.
At the time of writing, Tether’s XAUT has a 2.18% premium compared to the current spot value of gold. Pax gold (PAXG) carries a 0.26% premium, and both tokenized gold asset market valuations have grown during the last 30 days. Data indicates that Paxos Trust Company’s PAXG had a market valuation of $424 million on February 19, 2022. A month later, metrics show PAXG’s market cap grew by over 43% to $611 million. XAUT’s market cap grew from $430 million 31 days ago to today’s $486 million, jumping more than 13%.
Leveraging the average price per ounce of gold over the last 30 days ($1,875) and dividing $611 million by that number would mean Paxos Trust Company’s vaults hold about 325,333 ounces of fine gold. Using the same average and dividing it by PAXG’s market cap increase shows Paxos Trust Company added around 99,200 ounces to its vaults since February 19. The same math shows Tether added around 29,866 ounces of gold to the company’s stash. Between both projects, that’s around 129,066 troy ounces of .999 fine gold backing the tokenized gold crypto assets.
The 30-day average price per ounce, however, is different than the recorded number of tokenized gold crypto assets from both projects. At the time of writing, PAXG’s circulating supply is 317,255 tokens and XAUT’s circulating supply is 246,524 tokens. Each token equates to one troy ounce of .999 fine gold stored in vaults. While coingecko.com’s data shows a circulating supply of 246,524 XAUT tokens, Tether’s transparency page indicates there are 226,289 XAUT available.
Perth mint gold token (PMGT) has a much smaller market valuation than the gold tokens issued by Paxos and Tether. At the time of writing, PMGT’s market capitalization is around $2.1 million and PMGT trading volume has been around $13,650 in swaps during the last 24 hours. PAXG’s 24-hour trade volume today is $14.4 million while XAUT’s daily volume is $1.5 million.
What do you think about the tokenized gold tokens that have seen significant growth and premiums during the last month? Let us know what you think about this subject in the comments section below.
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