Why Tokenized Gold Is Booming as Spot Gold Breaks Records

As digital currencies and traditional assets are converging, gold-backed crypto tokens have emerged as a unique investment ￰2￱ referred to as “tokenized gold,” these assets combine the stability of gold with the flexibility of blockchain ￰3￱ the price of gold continues to hit new all-time highs, the demand for gold-backed tokens has ￰4￱ analytics platform Lookonchain recently posted on X that two crypto whales bought more than $30 million worth of Tether Gold (XAUt) over the past ￰5￱ are buying $XAUT (Tether Gold)! ￰6￱ bought 4,463 $XAUT ($18.7M) over the past ￰7￱ 0xdfcA bought 2,879 $XAUT ($12.1M) today. ￰0￱ ￰1￱ ￰8￱ — Lookonchain (@lookonchain) October 15, 2025 Alex Tapscott, CEO of CMCC Global Capital Markets, told Cryptonews that as gold continues to break $4,000, tokenized gold volumes will likely skyrocket.

“The total volume of tokenized gold is about $3 billion—up from less than $500 million at the beginning of this year—and daily volumes are over $600 million,” Tapscott ￰9￱ added that gold-backed toke ns have become the fastest-growing category of tokenized assets to ￰10￱ is impressive, as Galaxy Digital predicts tokenized assets will hit $1.9 trillion over the next five ￰11￱ Are Gold-Backed Crypto Tokens? Alex Melikhov, co-founder of digital asset management firm BrettonWoods, told Cryptonews that gold-backed cryptocurrencies are digital tokens whose value is directly tied to physical gold held in reserve. “Each token represents ownership of a fixed amount of gold, typically one troy ounce or a fraction of it,” Melikhov ￰12￱ elaborated that the physical gold is typically stored by a certified custodian, while the issuer of the gold-backed currency holds legal ￰13￱ issuer, in turn, commits to redeeming an equivalent amount of gold upon presentation of the ￰14￱ the volatile nature of cryptocurrency, Melikhov believes that gold-backed tokens may appeal more to conservative investors who desire stability and real-world value support rather than price volatility.

“Gold has a 5,000-year track record as a store of value, while Bitcoin and Ethereum are more speculative,” he ￰15￱ added that tokenized gold offers digital convenience for traditional ￰16￱ include 24/7 transfer and trading, along with instant settlement, all while retaining the familiarity of an underlying tangible asset. “Tokenized gold bridges the psychological gap between traditional finance and decentralized finance,” Melikhov ￰17￱ of Gold-Backed Tokens While the market cap of gold-backed cryptocurrency is close to $3 billion, Tether Gold (XAUt) and PAX Gold (PAXG) are currently among the top-performing gold-backed tokens on the market.), Matrixdock Gold (XAUM), and Comtech Gold (CGO).

Gold-Backed Crypto Token Use Cases One of the best use cases for gold-backed crypto tokens is to serve as a hedge against ￰18￱ instance, Melikhov believes that inflation persistence and geopolitical tension are pushing investors toward hard assets like gold. “Now that tokenized gold has credible infrastructure, regulated issuers, audited reserves, and access through major exchanges, investors are comfortable holding tokenized commodities as an alternative to fiat-backed stables,” he ￰19￱ addition, Tapscott mentioned that tokenized gold can be pledged as collateral in DeFi protocols, allowing investors to get leverage. “Similar to a margin loan in a brokerage account but on-chain—big picture tokenized gold makes the gold more useful, fungible, and marginable,” he said.

Additionally, as more investors seek exposure to gold in today’s digital economy, gold-backed crypto tokens seem to be the answer. “Holding physical gold poses security risks, and it’s not easy to move, store, or ￰20￱ are—tokenized gold democratizes gold ownership,” Tapscott ￰21￱ and Challenges to Consider While gold-backed crypto tokens gain traction, it’s also important to point out the risks associated with these digital ￰22￱ instance, Melikhov believes that the main challenges are custodial and regulatory. “Investors must trust that the gold truly exists, remains unencumbered, and is redeemable on demand,” he ￰23￱ this, Illia Otychenko, lead analyst at CEX.

IO, thinks trust and transparency remain an issue, noting that investors need proof that the gold truly exists and is fully backed. “If investors feel confident about the reserves, this could provide an additional boost for the asset,” Otychenko ￰24￱ example, on July 24, Tether published its Q2 attestation report confirming that XAUt was backed by more than 7.66 tons of physical ￰25￱ noted that shortly afterward, XAUt began confidently surpassing both PAXG and KAU in daily trading volume. “A few weeks after that, XAUt executed the largest single-day supply expansion in tokenized gold history,” Otychenko ￰26￱ transparency remains key, liquidity is yet another ￰27￱ pointed out that only a few venues currently offer deep trading markets for gold-backed crypto tokens.

What’s Next For Gold-Backed Crypto Tokens Challenges aside, gold-backed crypto tokens will likely continue to perform ￰28￱ also depends on key fundamental drivers, such as expectations of future ￰29￱ rate cuts, threats to ￰30￱ independence, geopolitical risks around the world, ￰31￱ policy and tariffs, and government fiscal policy and rising debt. “I think within a few years there will be trillions in tokenized real-world assets and gold will be one of the biggest beneficiaries,” Tapscott said. “Tokenizing gold is just one of many ways in which blockchains are bringing finance into the 21st century.”