The market value of tokenized gold has now surged past $3 billion, driven by a rally that sent the price of gold over $4,100 for the first time ever after breaking several all-time highs this year amid a monster of uncertainty all around the world. It is the asset’s best year-to-date run in more than forty-five years, according to data from CoinGecko, which shows just how much blockchain-based versions of the metal have grown in circulation. Since January, the number of wallets holding tokenized gold has climbed by 53%, according to rwa.xyz. At the same time, supply has surged, with Tether Gold up 52% and Paxos Gold rising 50%. These tokens are designed to represent ownership of physical gold, but traded as crypto. Investors load into tokenized gold as fiat weakens The rally is part of what analysts call the debasement trade. Since the start of the year, gold has gained 54%, outpacing Bitcoin’s 31% climb. Tom Bailey, head of research at HANetf, said, “Gold is on track for its strongest annual performance since 1979. Mounting fiscal strains across developed economies are raising questions about long-term debt sustainability.” Bailey was pointing to the value erosion in currencies such as the US dollar. Governments have expanded deficits and printed more money, while inflation has run above target levels. That has led investors to buy gold and Bitcoin, assets seen as a safer way to protect wealth. Political events have also added fuel. The election of Sanae Takaichi as Japan’s prime minister boosted the trend. She supports more public spending and tax cuts, a policy mix seen as negative for the yen. Investors are betting those steps will weaken Japan’s currency and push more demand toward gold and Bitcoin. Gold rally brings tokenization into focus The record-breaking price run is encouraging both traditional and crypto investors to look at gold in new ways. Timo Lehes, co-founder of Swarm, said, “Every new all-time high brings renewed interest to an asset and gold’s breakout is no exception. We’re seeing clear momentum toward real-world assets becoming a backbone of onchain finance.” One of the key features of tokenized gold is its use in decentralized finance. Holders can deploy it on networks such as Ethereum, giving the commodity more utility beyond storage. Even with this expansion, the market for tokenized gold remains small compared to traditional investment vehicles. Gold ETFs still dominate, holding $461 billion in assets this year, and recording inflows of $64 billion, figures released by the World Gold Council show. The trend has also been tied to wider economic fears. Javier Rodriguez-Alarcón, chief investment officer at XBTO and a former BlackRock and JPMorgan executive, said the so-called debasement trade has made crypto products clear winners. The recent government shutdown reignited concerns about fiat stability, sending money toward both Bitcoin and tokenized precious metals. Meanwhile, Bitcoin set a new all-time high this week, briefly touching $126,200 before pulling back near $123,200. The crypto has added about 30% year-to-date. But the Bitcoin-to-gold ratio now sits at 31.6, down from above 40 in December 2024, showing that gold has been the stronger performer in recent months. Equity markets have also rallied at the same time. The S&P 500 reached 6,753 points, setting a fresh record even as alternative assets climbed. Tokenized gold products remain unique. Each token is backed by physical gold held in secure vaults, while giving investors the portability and divisibility of crypto. The model combines the characteristics of a commodity that has stood the test of time with the technology powering today’s markets. Want your project in front of crypto’s top minds? Feature it in our next industry report, where data meets impact.
