It is no surprise that in times of uncertainty, investors come back to holding physical gold asset classes. Over the course of many months, we have regularly advocated that Bitcoin is not 'Digital Gold'.
Anyhow lets check out some interesting facts and statistics during Q1, 2022.
Geopolitical uncertainty, like Russia's invasion of Ukraine, tends to drive interest in gold. There was a 6% uptick across the whole gold market from January to February, according to the World Gold Council.
Pax Gold (PAXG), a crypto token that represents actual bullion, has seen a 66% jump in supply since mid-February. Each Pax Gold token is enabled by the Ethereum blockchain, but backed by real physical gold. Pax Gold's total supply hit 318,060 tokens on March 31 (backing 800 real bars), with just under 40% of that minted since Feb. 14. It launched in September 2019.
Boasting a modest market cap of $614 million, the phenomenal increase in volumes suggests that investment in Physical Gold Backed Cryptos is trending more than Bitcoin and ETFs.
This is because Gold ETFs represents exposure to the market without actual ownership. They also carry an annual fee, usually around 0.65% which is much higher than the small fees of Physical Gold Backed Cryptos such as maintaining on-chain transactions, minting and physical redemption.
The underlying value of Bitcoin is notional as it does not represent ownership of any physically backed asset class.
Platforms such as AgaGoldy offered by AgaBullion's suite of digital products, also allows users to check and track the serial number of the bar that they own a piece of.
They call Bitcoin "Digital Gold," but the original cryptocurrency is now facing a little competition from actual gold.
Although in its infancy and requires much infrastructure development, Physical Gold Backed Cryptos is the way forward for investors.