Cryptocurrency Issuance Anchored to Gold Hits Three-Year High, While Central Bank Purchases Decline

BlockBeats News, May 4th. The gold market is undergoing changes, with central banks around the world slowing their purchases, and growing demand for Exchange-Traded Funds (ETFs) and gold-backed cryptocurrencies. The latter has recently reached its highest level in three years, measured by net minting volume.

According to rwa.xyz's data, gold-backed tokens worth over $80 million have been minted in the past month. This growth has driven a 6% increase in the industry's market cap, reaching $1.43 billion. At the same time, monthly transfer volume surged by 77% to $1.27 billion, signaling a significant resurgence of interest in digital representations of gold.

The latest report from the World Gold Council shows that total gold demand in the first quarter of this year reached 1,206 tons, a 1% year-on-year increase, marking the strongest first quarter since 2016. Although central bank purchases slowed to 244 tons, down from 365 tons in the fourth quarter, demand remains robust. Gold ETFs have played a key role in this shift. Investment demand more than doubled to 552 tons, indicating investors are turning to gold, a move historically dominated by central banks.

This influx of funds has driven the average quarterly price of gold to a record $2,860 per ounce, a 38% year-on-year increase. However, the price of gold fell by 2.35% last week, despite having risen by 23.5% year-to-date.