Turbulence in the stock markets has been a topic of conversation for the last few weeks. Stock and crypto prices have tanked in the last week as compared to the price of gold in the same period. Gold prices have risen 3.85% to $1897 and change for an ounce as of February 19th. At the same time, demand for crypto coins that are backed by gold has gone up significantly.
All of this uncertainty is because of inflation and the war between Russia and Ukraine. Equity markets have taken a sharp downturn and all top US stock indices are in the red. Crypto markets followed suit and the losses have put the value at $1.88 trillion. In sharp contrast to these losses, gold has rallied, and prices are higher. Silver values have also gone up in the last four weeks.
This has resulted in higher demand for crypto coins backed by gold. Tether gold and 3 other tokens in this category have gone up in value. This rise ranges between 2% to 8%. As of 25 days ago, information released by Bitcoin indicates that valuations of gold backed crypto has been going up. For instance, PAXG’s value has gone up over $92 million (USD) in value. This is a rise of 16,000%.
As in the case of stablecoins, crypto buyers are finding that gold backed currencies especially in the digital sector are worth investing in. This trend is here to stay, and gold is a good hedge against downturns in any market.