Tokenized Gold Approaching $2 Billion Market Capitalization Amid Tariff Uncertainties

Overview

As risk-associated financial assets such as cryptocurrencies faced downturns amid ongoing tariff issues, tokenized gold has risen to prominence.

Key Points

The market value of tokenized gold neared $2 billion, riding the wave along with physical gold prices as investors shifted away from riskier assets during tariff-related conflicts.
There was a dramatic increase in trading activities, with weekly trading volumes for Paxos Gold (PAXG) and Tether Gold (XAUT) skyrocketing by 900% and 300%, respectively, since the inaugural date for President Trump on January 20, according to a report from CEX.IO.
With the rise in global tensions and the growing trend of real-world assets, tokenized gold is becoming a popular safe haven for crypto investors, noted Alexandr Kerya from CEX.IO.

As the market capitalization of gold-backed tokens danced near $2 billion on Wednesday, they experienced a 5.7% growth in the last 24 hours, as reported by CoinGecko. This uptick coincided with gold prices temporarily surpassing $3,170 per ounce, as shown by data from TradingView.

Tokenized gold trading volumes hit over $1 billion weekly—the highest levels since the bank anxiety in March 2023, as indicated by the CEX.IO analysis.

PAXG and XAUT, the two largest tokenized gold assets, represented a substantial portion of the market and saw significant weekly trading volume increases of 900% and 300%, respectively, since Trump’s inauguration. During this time, PAXG noted an influx of $63 million, based on data from DefiLlama.

The upward trend in tokenized gold aligns with the broader physical gold market, which has seen double-digit growth this year amid economic instability and fears of inflation. Even gold faced temporary downturns during the widespread market sell-off linked to U.S. tariffs, yet rebounded swiftly to its peak values.

Since President Trump’s inauguration, tokenized gold has emerged as one of the leading segments within crypto, seeing a 21% rise, while stablecoins only saw an 8% increase, and Bitcoin witnessed a decline of 19%.

Insight

“Tokenized gold is becoming a key strategy for diversification among crypto users alongside Bitcoin,” stated Alexandr Kerya. “It offers a safer and more stable management approach within the crypto sphere, enabling users to retain their reliance within the ecosystem while drawing value from the physical asset’s stability.”

Additionally, the expanding narrative of real-world assets facilitates broader and more intuitive access to gold investment for users who may not have previously considered it.