The sharp rise in gold prices owes much to the cryptocurrency market.

The gold price has reached a new high again and again.

Since late August, the gold price has entered a new round of crazy rise and continuously refreshed its historical high. As of the time of publication, COMEX gold once reached $4,392 per ounce during the intraday trading on October 17, refreshing its historical high again. The cumulative increase in the past six trading days has reached an astonishing 10%. Moreover, in the short period of less than two months from August 20 to October 16, the increase in the gold price within this period has even reached an amazing 30%.

Chart: COMEX gold futures price, total market value of Tether Gold tokens and PAXG coins. Source: Wind, DefiLlama, 36Kr

In our "Perspective" article "The Fed's interest - rate cut is a done deal, and the global gambling moment for the gold price has arrived", a core judgment is that the gold price will definitely rise when the Fed cuts interest rates. After the Fed announced an interest - rate cut on September 17 local time, the gold price rose accordingly, and the above judgment has been fulfilled. In addition, the article also pointed out that the continuous expansion of gold - backed stablecoins will provide long - term support for the gold price. The long - term positive relationship between the gold price and the scale of gold - backed stablecoins also confirms the above logic.

So, what are the internal logics behind the recent continuous record - breaking highs of the gold price and the sharp rise in the total market value of gold - backed stablecoins? Where do the other core driving forces for the upward movement of the gold price come from?

Gold is becoming "crypto - centric"

An important reason for the continuous record - breaking highs of gold this year is that the market has high expectations for the expansion of gold - backed stablecoins.

Currently, the capital market has a strong demand for stablecoins. From the perspective of trading volume, the market widely recognizes two sets of data from ARK Invest led by Cathie Wood and Deutsche Bank. ARK Invest's report shows that the total global trading volume of stablecoins in 2024 reached as high as $15.6 trillion. Deutsche Bank's data shows that in 2024, the total global trading volume of stablecoins reached $27.6 trillion, even exceeding the combined trading volume of Visa and Mastercard.

Driven by the strong demand, the scale of stablecoins is expanding rapidly. As of mid - June this year, the total global market value of stablecoins has exceeded $250 billion. The mainstream market expectation is extremely astonishing. That is, by 2035, the global market scale of stablecoins will be no less than $4 trillion, with a corresponding CAGR of up to 32%. The current US government expects that by the early 2030s, the market scale of stablecoins will reach $3.7 trillion, with a corresponding CAGR of even up to 80%.

Looking at the types of stablecoins, currently, the main anchors of stablecoins are the US dollar and US Treasury bonds, and the scale of gold - backed stablecoins is still very small. As of July this year, the market values of PAXG coins and Tether Gold tokens, the two largest gold - backed stablecoins, were only $900 million and $800 million respectively. In the same period, the total market values of USDT and USDC reached as high as $161 billion and $64 billion respectively. It can be seen that both the current scale and the long - term market expectation indicate that there is still huge room for the growth of gold - backed stablecoins.

From the perspective of asset allocation, the core logic behind the market's expectation of the continuous expansion of gold - backed stablecoins is that: compared with other types of stablecoins, the core advantage of gold - backed stablecoins lies in the two attributes of scarcity and inflation resistance of their anchor asset - gold.

The above two attributes of gold are not only conducive to maintaining the long - term stability of the value of gold - backed stablecoins but also provide a certain function of resisting systematic risks for the customers of gold - backed stablecoins. Especially at times when there is a need to release risk - aversion demand, the stable value of gold - backed stablecoins and the upward movement of the gold price driven by the expansion of gold - backed stablecoins together form a double - insurance for risk - aversion.

Chart: Total market value of major global stablecoins (Unit: $1 billion; as of July 2025). Source: DefiLlama, 36Kr

Regarding the gold price, as the trading demand for gold - backed stablecoins continues to grow, its market scale will continue to expand. Due to the fact that stablecoins are anchored to assets at a fixed ratio, the trend of the continuous expansion of gold - backed stablecoins will become one of the important forces supporting the long - term upward movement of the gold price in the future.

Take Tether, the world's largest stablecoin issuer, as an example. The scale of Tether Gold tokens issued by it has grown quite rapidly. The total market value in July this year was about $800 million, and by October 16, it had increased to about $1.6 billion, achieving a doubling growth in a short period. More notably, Tether said in the middle of this year that it had established its own independent gold vault in Switzerland to store gold reserves worth about $8 billion and planned to expand its gold reserves in the future.

In the future, as the entire stablecoin market moves towards a scale of trillions of dollars, Tether, as the industry leader, and the Tether Gold tokens issued by it will also benefit from the first - mover advantage. Considering the 1:1 anchoring relationship between Tether Gold tokens and physical gold, then Tether's gold reserves will be the key factor restricting the scale of its gold - backed stablecoins, and this logic also applies to other types of gold - backed stablecoins.

Therefore, against the background of the long - term prosperity of the gold - backed stablecoin track, stablecoin issuers such as Tether also have the motivation to expand their own gold reserves to cope with the rapid expansion of gold - backed stablecoins. Currently, there are market rumors that Tether buys 2 tons of physical gold every week, which is equivalent to the monthly gold reserve purchase volume of the People's Bank of China.

Looking at the gold price in recent years, the continuous and large - scale gold purchases by global central banks have gradually made the supply - demand relationship the core factor affecting the gold price. Now, with stablecoin issuers joining the ranks of gold buyers, the pricing logic that the supply - demand relationship affects the gold price has been further strengthened. In a sense, gold is currently undergoing a round of "crypto - centric" evolution.

Optimistic about the long - term upward trend of the gold price

Regarding the recent sharp rise in the gold price, especially the fact that it refreshed its historical high during the intraday trading on October 17, one important short - term factor is that the bad - debt problems disclosed by two US regional banks, Zions and Western Alliance, have worried investors, leading to a sharp decline in US bank stocks. Driven by the risk - aversion sentiment, a large amount of funds have flocked to gold, helping the gold price to refresh its historical high again. In addition to this short - term factor, all aspects of factors are quite favorable for gold.

Looking at the future of the gold price from the current pricing logic of gold, in terms of supply and demand, central banks' willingness to buy gold is still strong and sustainable at present. Coupled with the continuous gold purchases by stablecoin issuers to expand the scale of gold - backed stablecoins, these two important long - term gold - buying forces have provided stable support for the long - term upward movement of the gold price.

The core logic behind central banks' active and large - scale increase in gold holdings lies in risk - aversion. At the macro level, in recent years, geopolitical conflicts and trade frictions have occurred frequently, continuously impacting the global credit system. At the same time, the high level of US debt has been tearing the credit of the US dollar, and there are potential systematic risks in the US dollar system.

Looking back at history, the gold price is usually negatively correlated with the credit of the US dollar. Every round of continuous weakening of the US dollar credit has been followed by a historical bull market for gold. The continuous de - globalization has obviously shaken the foundation of the US dollar credit. Looking at a key event that has damaged the US dollar credit recently, that is, the Fed's interest - rate cut in September. The market generally believes that Jerome Powell made a "cowardly interest - rate cut" under coercion. As the independence of the Fed is further damaged, the re - evaluation of the US dollar credit has further increased the allocation value of gold.

On the other hand, the Fed has now entered an interest - rate cut cycle. Based on the historical rule that the gold price is negatively correlated with the US dollar, the loose expectation brought about by the interest - rate cut resonates with the core pricing logic that strong demand drives the upward movement of the gold price. Coupled with the fermentation of the risk - aversion sentiment triggered by recent events such as trade frictions and the sharp decline of US bank stocks, under the dominance of the above factors, the gold price has continuously refreshed its historical high recently. From a long - term perspective, the continuity of the interest - rate cut cycle will provide continuous and stable support for the upward movement of the gold price.

From the perspective of capital, as the valuation of overseas technology sectors represented by artificial intelligence has reached a high level, one possible scenario in the market is that the technology sectors will peak and adjust, and the market's risk - aversion demand will gradually spread from the geopolitical end to the trading end. With the risk - aversion asset attribute of gold itself and its prominent long - term allocation value, it is expected to attract a portion of funds to flow in, thereby driving the gold price to enter a new round of over - rising market.

Chart: Valuation of the Nasdaq Technology Market - Cap Weighted Index. Source: Wind, 36Kr

In terms of safety margin, although many institutions such as the Shanghai Gold Exchange, the Shanghai Futures Exchange, the Industrial and Commercial Bank of China, and the China Construction Bank have issued risk warnings regarding the continuous sharp rise of the gold price, the latest view of the World Gold Council shows that from a strategic perspective, the overall gold holdings are still at a low level, and the speculative positions and net long positions in the futures market have not reached historical peaks, indicating that the market is not saturated yet, and gold still has continuous attractiveness.

*Disclaimer:

The content of this article only represents the author's views.

The market is risky, and investment should be cautious. Under any circumstances, the information in this article or the opinions expressed do not constitute investment advice to anyone. Before making an investment decision, if necessary, investors must consult professionals and make decisions carefully. We have no intention of providing underwriting services or any services that require specific qualifications or licenses for the trading parties.