Gold-backed crypto minting hits 3-year high as ETF demand surges, central banks slow buying

Gold-Backed Crypto Minting Hits 3-Year High as ETF Demand Surges, Central Banks Pull Back

Shift in gold market sees record investment flows from digital tokens and funds

The gold market is undergoing a notable transformation, with tokenized gold and exchange-traded funds (ETFs) emerging as dominant players amid a slowdown in central bank gold purchases. According to fresh data and market analyses, investor appetite for digital and financialized gold products has surged to multi-year highs.

In particular, gold-backed cryptocurrencies experienced a dramatic resurgence in recent weeks. Data from rwa.xyz shows that more than $80 million worth of tokenized gold was minted in the past month alone, pushing the sector’s total market cap up 6% to $1.43 billion. Monthly transfer volume rose 77% to $1.27 billion, the highest in three years, signaling a renewed interest in digital representations of physical gold.

Gold demand surges to nine-year high in Q1

The increase in token activity reflects a broader bullish trend in the gold market. The World Gold Council reports that total gold demand in Q1 2025 reached 1,206 tonnes, marking the strongest first quarter since 2016 and a 1% year-over-year increase.

However, this rising demand came with a shift in its source:

• Central bank gold purchases declined sharply to 244 tonnes, down from 365 tonnes in Q4 2024, signaling a pause in the accumulation strategies seen in recent years.

• Investment demand, led by ETFs, more than doubled to 552 tonnes, driven by persistent macroeconomic uncertainty and a flight to perceived safe-haven assets.

Record gold prices and digital asset convergence

Investor demand helped lift the average quarterly gold price to a record $2,860 per ounce, a 38% increase year-over-year, even as prices dipped modestly by 2.35% in the past week. Year-to-date, spot gold has climbed 23.5%, currently trading around $3,240.

That price trajectory has drawn renewed interest from both traditional gold investors and cryptocurrency enthusiasts, fueling growth in tokenized gold platforms, which offer the combined appeal of asset-backed stability and blockchain flexibility.

Jewelry demand softens, but physical gold stays in play

Not all segments of the gold market shared equally in the upside. Jewelry demand fell to pandemic-era lows, hit by high prices and shifting consumer behavior. However, bar and coin demand remained elevated, particularly in China, where retail investors continue to view gold as a hedge against market volatility and currency fluctuations.

What’s next: digital gold's expanding role in portfolio diversification

With central banks stepping back and retail and institutional investors stepping in, the dynamics of gold demand are changing. Tokenized gold, once a niche experiment, is increasingly being treated as a legitimate digital asset class, particularly for investors looking to diversify portfolios across physical, financial, and decentralized environments.

The sharp growth in minting and transaction volumes suggests that tokenized gold is becoming a preferred instrument for those seeking to hedge inflation and geopolitical risk without sacrificing liquidity.

As traditional and digital financial worlds converge, gold-backed cryptocurrencies and ETFs are reshaping how investors access and store value. With gold prices near all-time highs and token demand surging, the metal’s future may lie as much in code as in coin.

Stay tuned to The Horizons Times for the latest on gold, crypto, and the evolving global investment landscape.