Digital Gold Rises as Gold-Backed Crypto Hits 3-Year High While Central Bank Buying Slows

In Brief:

Over $80M in gold-backed tokens were minted in the past month, driving the sector’s market cap to $1.43B.

Central banks slowed purchases, while ETFs and crypto saw surging investor demand.

The gold market is undergoing a quiet transformation, with digital gold gaining traction even as central bank accumulation slows. According to rwa.xyz, more than $80 million worth of gold-backed cryptocurrencies were minted in the past month—pushing total market capitalization up 6% to $1.43 billion, the highest in three years.

This uptick in minting coincides with a 77% surge in monthly transfer volume, reaching $1.27 billion, highlighting renewed interest in tokenized gold as both a store of value and a DeFi asset.

In contrast, the World Gold Council reports that central banks scaled back their gold purchases in Q1 2025, buying only 244 tons—down sharply from 365 tons in the previous quarter. Still, total gold demand reached 1,206 tons, marking the strongest first quarter since 2016.

Gold ETFs, meanwhile, played a pivotal role in absorbing market demand. Investment appetite more than doubled to 552 tons in Q1, indicating a shift from sovereign to retail and institutional investors.

This capital influx helped push average gold prices to an all-time quarterly high of $2,860 per ounce—up 38% year-over-year. However, the market remains volatile, with prices dropping 2.35% last week despite a 23.5% YTD increase.

With gold-backed cryptocurrencies gaining ground, analysts expect more overlap between precious metals and blockchain-based finance in the coming quarters.

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