Gold trading on tokenized platforms surpasses $19 billion in volume, approaching the scale of traditional gold Exchange-Traded Funds (ETFs).
In a notable shift in the investment landscape, a new survey suggests that some Americans are considering ditching traditional gold reserves in favour of Bitcoin's digital counterpart, Bitcoin-backed gold (tokenized gold). Despite institutional investors still dominating traditional gold ETFs, tokenized gold is making significant strides, surpassing many smaller counterparts and gaining traction against gold ETFs.
The growth of tokenized gold trading volume can be attributed to several key factors. Enhanced liquidity and transparency, facilitated by tokenization and blockchain technology, have made transactions more efficient and trustworthy. Unlike traditional stock markets, which are closed overnight, tokenized gold allows for 24/7 global trading, aligning with the continuous nature of commodity markets.
Moreover, tokenized gold enables fractional ownership, allowing investors to purchase fractions of a gram of gold at a lower cost. This accessibility is attractive to a broader audience, especially smaller investors, in contrast to traditional gold investments which often require larger sums.
Operational efficiency is another significant advantage of tokenized gold. Instant cross-border settlements, facilitated by blockchain, reduce transaction times and costs associated with traditional gold trading or ETFs. Additionally, tokenization can reduce storage and management costs, as physical gold is held in secure vaults but represented digitally.
The gold market, with a traditional market size over $13 trillion, offers immense potential for tokenized gold to grow. As institutions increasingly adopt tokenization, the market is expected to expand significantly, driven by trust in blockchain technology and the efficiency it offers.
Gold, historically serving as an inflation hedge, offers protection in economic uncertainty. Tokenized gold offers this protection with enhanced liquidity, making it more appealing during such times. Furthermore, tokenized gold can be easily integrated into diversified investment portfolios, providing exposure to a traditional safe-haven asset without the need for physical storage.
According to a July 8 report by CEX.io, tokenized gold is gaining traction compared to gold ETFs. Tokenized gold trading volume has surpassed $19 billion so far this year. However, tokenized gold is not yet widely perceived as a long-term store of value.
Most of the new trading volume in tokenized gold is being driven by retail and crypto-native investors. In the second quarter of 2025, volume in the tokenized gold asset class rose from $2.4 billion to $19.2 billion-an eightfold increase. The number of PAXG holders grew by 25%, while XAUT holders increased by 151%.
The growth in tokenized gold trading volume has significantly outpaced all gold ETFs so far this year. While the total market cap of GLD rose 36%, tokenized gold's grew just 29%. Tokenized gold now sees higher trading volume than SGOL, AAAU, IAUM, and OUNZ.
As capital continues to shift from gold ETFs to tokenized gold assets, it appears that tokenized assets are gradually proving to be a viable alternative to traditional investment instruments.
- Tokenization and blockchain technology have facilitated enhanced liquidity and transparency in tokenized gold trading, making transactions more efficient and trustworthy.
- Unlike traditional gold investments, tokenized gold allows for fractional ownership, making it accessible to a broader audience, including smaller investors.
- Operational efficiency is another advantage of tokenized gold, offering instant cross-border settlements, reduced transaction times and costs, and lower storage and management costs compared to traditional gold trading.
- The gold market, with a market size over $13 trillion, presents immense potential for tokenized gold to grow as institutions increasingly adopt blockchain technology and the efficiency it offers.
- Tokenized gold trading volume has surpassed $19 billion so far this year, significantly outpacing all gold ETFs, indicating that tokenized assets may be gradually proving to be a viable alternative to traditional investment instruments.
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