Spot Bitcoin exchange-traded funds recorded their largest-ever daily outflow yesterday. Investors pulled nearly $1 billion from these funds, marking a significant retreat. Gold-backed ETFs and tokens behave much more stable.
Meanwhile, spot gold ETFs continue to attract substantial capital. This trend could benefit gold-backed cryptocurrencies, which track the precious metal's price.
Physically-backed gold ETFs registered their largest weekly inflow since March 2022 last week. Data from the World Gold Council showed inflows of 52.4 tons, valued at approximately $4.9 billion. North American investors accounted for most of this increased demand.
Gold ETF holdings now stand at 3,326 tons, worth roughly $314 billion, according to the group. Gold has gained nearly 11% so far in 2025 despite recent price fluctuations. The metal is up 43% year-over-year and currently trades at $2,910 per ounce.
Analysts attribute this performance to growing geopolitical tensions. Uncertainty surrounding threatened Trump tariffs has also driven investors toward the safe-haven asset.
Gold-backed cryptocurrencies have consequently outperformed the broader crypto market. Tokens such as Paxos Gold (PAXG) and Tether Gold (XAUT) have benefited from gold's rise. The broader crypto market, measured by the CoinDesk 20 Index, is up 26% year-over-year—a significantly smaller gain than gold's 43% increase.
Demand for these gold-backed tokens has increased substantially. Data from RWA.xyz reveals that over $25 million worth of commodity-backed tokens were minted this month. This represents the largest monthly volume since December 2022. Approximately $12 million worth of tokens were burned during the same period.
Gold supply has remained relatively stable despite rising demand. World Gold Council data shows mining production in last year's fourth quarter dropped by around two tons compared to the previous quarter. Hedging and recycling increased slightly. Overall, tracked supply rose by approximately 1% year-over-year.
Disclaimer: The information provided in this article is for educational purposes only and should not be considered financial or legal advice. Always conduct your own research or consult a professional when dealing with cryptocurrency assets.