Tokenized gold market surges to nearly $2 billion amid tariff fears and geopolitical tensions, offering a safe-haven play for investors seeking diversification.
The market capitalization of gold-backed tokens has surged to almost $2 billion, outperforming most crypto sectors in market cap growth since Trump‘s inauguration.
Gold-backed tokens are digital assets that represent ownership of physical gold reserves.
They are often issued by banks, financial institutions, or companies and can be traded on cryptocurrency exchanges.
Each token is backed by a corresponding amount of gold stored in a secure vault.
This allows investors to own and trade gold without the need for physical storage.
Gold-backed tokens offer a convenient way to diversify investment portfolios and hedge against market volatility.
A recent report by CEX.IO highlights the growing trend of investors flocking to tokenized gold as a safe-haven play amid rising geopolitical tensions and inflation concerns. The two largest tokens, Paxos Gold (PAXG) and Tether Gold (XAUT), have seen their weekly trading volumes surging over 900% and 300%, respectively, since January 20.
Tokenized gold refers to digital representations of physical gold, stored in a secure online vault.
It allows investors to own and trade gold without physically holding it.
Tokenized gold is created through a process called tokenization, where the ownership of physical gold is split into smaller units, or tokens, that can be bought and sold on digital platforms.
Tokenized Gold as a Diversification Strategy
According to ‘tokenized gold is emerging as one of the key diversification strategies among crypto-native users’ , Alexandr Kerya, VP of product management at CEX.IO, tokenized gold provides a safer and more stable approach to portfolio management, enabling users to stay within the crypto ecosystem while benefiting from the value and stability of the underlying physical asset.
The broader real-world asset (RWA) trend also helps make gold exposure more accessible and intuitive for users who may not have considered it before. As risk assets including cryptocurrencies struggled on Thursday amid tariff uncertainties, tokenized gold once again emerged as an outperformer in the carnage.
Market Performance
The market capitalization of gold-backed tokens swelled to just under $2 billion on Wednesday, up 5.7% over the past 24 hours. The rise coincided with the yellow metal briefly touching a fresh all-time above $3,170/oz . Weekly tokenized gold trading volume surpassed $1 billion, the highest since the U.S. banking turmoil of March 2023.
DefiLlama data shows that Paxos Gold (PAXG) experienced continuous inflows totalling $63 million during this period. The rally tracks the broader gains in physical gold, which posted double-digit increases in 2025 amid geopolitical uncertainty and inflation concerns.
