Cryptocurrencies backed by gold are starting to develop premiums as demand for the precious metal started surging after last month’s coronavirus-induced market crash.

According to CryptoCompare data, the premiums gold-backed cryptocurrencies like Tether Gold (XAUt), Pax Gold (PAXG), and Digix Gold (DGX) have been developing are accompanied by increases in trading volumes. The premiums have, over the last few days, ranged from 1-5% when compared to the price of gold’s .999 per Troy ounce spot price.

The spot price of gold has, over the last six months, surged from about $1,500 to $1,685, as fears surrounding the coronavirus outbreak started spreading and last month there was a major sell-off that saw most major .U.S. stock indices enter bear market territory. The precious metal is considered a safe haven, and demand for it has, as a result, been soaring.

Speaking to the press Mark O’Byrne, founder of the Goldcore firm, revealed dealers have been seeing large shortages of small gold bars and coins, noting “people want to buy, not to sell gold.” He added:

We have a buyers’ waiting list and we emailed our clients seeing who wished to sell their gold. At this time there are roughly only one or two sellers for every 99 buyers.

Demand has risen so much that gold-backed cryptocurrencies have started to develop premiums.  Tether’s XAUt token, the leading gold-backed cryptocurrency by market capitalization, is trading for $1,688 while the current gold spot price is of $1,685., having a rather small premium on it.

The Ethereum-based gold project Digix has a gold-backed DGX token that’s allegedly redeemable for 1 gram of gold. Each DGX token is currently trading for about $55.9. Acquiring 31 DGX tokens would cost more than $1,700, showing an even greater premium. Finally, PAXG is trading at $1,698.

Those who hold XAUt, PAXG, or DGX can allegedly redeem their tokens for physical gold. The premium, it’s worth noting, may be related to the costs associated with redeemed the precious metal, or with the trust put into the organizations behind the tokens.

Featured image via Pexels.