PAXG, XAUT & PMGT: Why these gold-backed stablecoins gaining attention?

Highlights

• Pax Gold (PAXG) is an ERC-20 token that runs on the Ethereum blockchain.
• Tether Gold (XAUT) is a gold-backed stablecoin offered by the TG Commodities Limited.
• Perth Mint Gold Token (PMGT) price rose over 6% in the last 30 days.

As global uncertainties rise, investors look for haven assets for investments. The gold-backed stablecoins have been in focus lately. Stablecoins are tied to an external asset like the US dollar or gold, thus, giving them stability from market fluctuations. They are also considered an alternative to Bitcoin (BTC), whose prices have become unaffordable to many people.

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Gold prices have also increased as yellow metal demand grew amid market volatility. Hence, investors may be betting on gold-backed stablecoins to hedge against inflation. Stablecoins offer instant liquidity and security because of the backing from real-life assets.

Let's explore three gold-backed stablecoins and their performance.

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Source: *Data provided by CoinMarketCap.com

Pax Gold (PAXG)

Pax Gold, launched in September 2019 by Paxos Standard (PAX) creators, is a gold-backed crypto. It is an ERC-20 token that runs on the Ethereum blockchain.

The token was priced at US$1,986.19 at 11:48 am ET on March 11, down 0.69% from its previous close. It has a market cap of US$616.58 million, and its fully diluted market cap is US$616.04 million.

Its one-day volume plunged 33.08% to US$77.19 million, and its current circulating supply is 310,426.65. The token returned 7.97% gains over the last 30 days.

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Tether Gold (XAUT)

Tether Gold or XAUT is one of the most popular gold-backed stablecoins in the market, offered by TG Commodities Limited. One XAUT represents one troy fine ounce of gold on a London Good Delivery gold bar.

It offers the token holders the perks of owning gold while removing the disadvantages that physical gold carries like high storage costs, limited accessibility, etc.

The XAUT token was priced at US$1,989.02 at 11:56 am, down 0.36%. Its trading volume tumbled 36.25% to US$1.96 million in the last 24 hours to Friday afternoon. It has a market cap of US$210.02 million, and its fully diluted market cap is US$209.82 million.

Its circulating supply is 105,549.09, and it returned 9.29% gains in the last 30 days.

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Perth Mint Gold Token (PMGT)

Launched in October 2018, Perth Mint Gold Token (PMGT) is an ERC-20 token. Each PMGT unit represents one fine troy ounce of physical gold, securely stored in the central bank grade vaults of the project's ecosystem.

The token is developed and issued by Trovio.

The token's price was US$1,987.16 at 12:04 pm ET on March 11, down 1.96%, while its volume declined 19.60% to US$19,561. It has a market cap of US$2.14 million, and its circulating supply is 1,077.75. In the last 30 days, its price surged 6.49%.

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Bottom line:

Although the stablecoins are less volatile, some investors argue that they provide low returns due to their dependency on centralized service providers who manage the assets. In addition, gas fees are higher in gold-backed stablecoins because of the underlying Ethereum blockchain.

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