Tokenized Gold Market Cap Surges 21% Amid Market Turmoil

Tokenized gold has emerged as a standout performer in the cryptocurrency market, with its market capitalization reaching nearly $2 billion on Wednesday. This surge comes amidst broader market turmoil, particularly driven by tariff uncertainties that have caused risk assets, including cryptocurrencies, to struggle. The rise in tokenized gold's market cap coincides with a brief spike in the price of physical gold, which touched a new all-time high above $3,170 per ounce.

The demand for gold-backed tokens has surged in recent weeks, fueled by market volatility and geopolitical tensions. Weekly trading volumes for tokenized gold exceeded $1 billion, marking the highest level since the U.S. banking turmoil in March 2023. The two largest gold tokens, Paxos Gold (PAXG) and Tether Gold (XAUT), saw their weekly trading volumes surge by over 900% and 300%, respectively, since January 20. PAXG also experienced continuous inflows totaling $63 million during this period.

The rally in tokenized gold mirrors the broader gains in physical gold, which has seen double-digit increases in 2025 due to geopolitical uncertainty and inflation concerns. However, even gold was not immune to the market-wide sell-off triggered by U.S. tariffs, with prices briefly dropping 6% before quickly recovering to record highs. Since the inauguration of the Trump administration, tokenized gold has been one of the top-performing sectors in the crypto market, with its market cap increasing by 21%. In contrast, stablecoins gained a more modest 8% in market cap, while bitcoin declined 19% and the total crypto market lost 26%.

Tokenized gold is increasingly being recognized as a key diversification strategy among crypto-native users, providing a safer and more stable approach to portfolio management. It allows 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) narrative is also making gold exposure more accessible and intuitive for users who may not have considered it before. This trend highlights the growing appeal of tokenized gold as a safe haven asset in times of market uncertainty.