What happened? Gold-backed crypto tokens spiked as spot gold hit new records and whales piled into XAUt.
Record-high spot gold above $4,000 has pushed strong demand for tokenized gold, growing the market from under $500 million earlier this year to about $3 billion now. Big buyers recently snapped up over $30 million of Tether Gold (XAUt) and daily trading volumes have topped $600 million. Top tokens like XAUt and PAXG expanded supply and trading, making tokenized gold the fastest-growing category of tokenized assets so far.
Who does this affect? Investors, exchanges, DeFi platforms and custodians are being pulled into tokenized gold.
Conservative investors who want a stable, asset-backed option now have a digital way to hold gold that’s easier to trade and move than physical bullion. Exchanges and DeFi apps benefit because tokenized gold can be listed, used as collateral, and add liquidity, while custodians and issuers face pressure to prove reserves and maintain transparency. Regulators and traditional bullion holders are also watching closely, since custody, redemption rights, and market liquidity are becoming central issues.
Why does this matter? Tokenized gold could reshape market flows, liquidity and valuations across gold and crypto markets.
If tokenized gold keeps attracting capital, it can channel more retail and institutional money on-chain and help support higher spot gold prices. Greater liquidity and the ability to use tokenized gold as collateral can deepen crypto markets and enable new leveraged products, though that also raises risks if transparency or redemption fails. Over the long run, tokenized real-world assets could become a multi-trillion-dollar market, forcing asset managers, banks and exchanges to adapt trading, custody and regulatory practices.