Global gold-backed crypto mcap surpasses $1 billion, nears all-time high

cnbctv18.com:

The resurgence of volatility in the equity market has forced investors to seek the safety net provided by precious metals such as gold and silver. As a result, gold-backed cryptocurrencies have also seen a surge in prices.On March 7, the two prominent gold-backed tokens -- PAX Gold (PAXG) and Tether Gold (XAUt) -- crossed the market capitalization of $1 billion combined, data accessed by CoinDesk shows.

The following day PAXG touched $2071 (within inches of its all-time high of $2083) while XAUt touched $2071, as per CoinMarketCap data. However, at the time of writing this copy, both tokens had slipped below the $2000-mark, down over 2 percent each over 24 hours.

Their combined market capitalization stood at about $811 million.“The rallying gold price seems to have attracted more crypto investors to the gold-backed tokens,” said Arcane Research in its latest weekly note.The two tokens have rallied by 60 percent year-to-date (YTD), piggybacking on the threat of impending “specter of stagflation” said Arcane Research. This is at a time when the global market capitalization of all cryptocurrencies combined has dropped by 20%, from $2.2 trillion to $1.75 trillion, during the same period, as per CoinMarketCap.“Stagflation is a serious risk, and higher and longer inflation is close to a certainty,” said Singapore’s Monetary Authority early on March 9, as reported by ForexLive.In economics, stagflation is a situation marked by high inflation, high unemployment and slow economic growth.The Russia-Ukraine war has created a supply shock for the global economy which has led to inflationary pressure in the face of surging energy and food prices.