Gold ETFs See Record Inflows as PAXG and XAUT Outperform the Wider Crypto Market

As traditional gold markets continue to gain momentum, cryptocurrency investors are increasingly seeking exposure to gold through digital assets like Paxos Gold (PAXG) and Tether Gold (XAUT), which offer a blend of gold’s value with the liquidity and accessibility of blockchain technology.

PAXG and XAUT have surged by 24.15% and 23.7%, respectively, year-to-date, reaching record highs above $3,300, closely tracking the performance of spot gold. However, both tokens have slightly pulled back to $3,265 for PAXG and $3,244 for XAUT.

While gold-backed cryptocurrencies are outperforming the wider market, the cryptocurrency sector has faced a significant downturn. Bitcoin (BTC) has dropped over 11% this year, and the broader crypto market, as indicated by the CoinDesk 20 (CD20) index, has fallen more than 30%.

This uptick in demand for gold-backed tokens reflects a broader flight to safety, as investors turn to gold amid rising global uncertainties, including the escalating U.S.-China trade tensions. Gold ETFs saw massive inflows in Q1 2025, with 226.5 tonnes added—marking the highest level of demand since early 2022. Notably, nearly 60% of the inflows came from North America, according to data from the World Gold Council.

Meanwhile, gold-backed cryptocurrencies saw $42.7 million in net token minting during the first quarter of the year, bringing their total market capitalization close to $1.4 billion, further fueling the growth of both gold-backed digital assets and the price of gold itself.