Why Tokenized Gold Is Booming While Gold Prices Swing

The tokenized gold market has surpassed $6 billion, expanding strongly amid short-term volatility in physical gold prices.

As investors seek exposure to hard assets through digital infrastructure, tokenized gold has become one of the fastest-growing segments of the broader digital asset market.

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Tokenized Gold Market Surges Past $6 Billion

According to data from Dune, the total market capitalization of tokenized gold has increased by more than $2 billion since the beginning of the year. At press time, the sector stood at $6.12 billion.

More than 1.2 million ounces of physical gold are now locked in custody to back these digital tokens, highlighting growing demand for blockchain-based representations of bullion.

Tether Gold (XAUT) remains the dominant player, with a market capitalization of $3.5 billion. It accounts for over half of the total tokenized gold market. 

According to Token Terminal data, its market cap has surged more than 50% over the past month alone. Tether CEO Paolo Ardoino previously stated that the company plans to increase gold exposure to 10–15% of its overall investment portfolio. 

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The firm has significantly accelerated its gold accumulation strategy, reportedly outpacing sovereign buyers such as Greece, Qatar, and Australia. In the last quarter of 2025, Tether added 27 metric tons of gold to its fund exposure.

Furthermore, Tether made a $150 million strategic investment in the precious metals platform Gold.com. The transaction gave Tether approximately 12% ownership of the company. 

This partnership will also allow Tether to integrate XAUT into Gold.com’s platform. The collaboration is designed to broaden “access to gold across digital and traditional distribution channels.”

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In addition to its expansion efforts, Tether also launched Scudo, a measurement unit representing 1/1,000 of an XAUT (Gold Ounce)

Paxos-issued PAX Gold (PAXG) ranks second in the sector with a market capitalization of $2.3 billion, following a 33.2% increase over the past month. Together, XAUT and PAXG account for the majority of activity within the tokenized gold ecosystem.

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Gold Prices See Volatility Following Record High 

Meanwhile, tokenized gold’s rise comes amid gold’s record rally, which has experienced notable volatility in recent sessions.

Market data shows that after reaching an all-time high of $5,602 per ounce on January 29, gold prices corrected sharply, falling to a low of $4,402 on February 2.

Following that decline, prices staged a partial recovery but faced renewed selling pressure yesterday. BeInCrypto previously reported that spot gold fell by more than 3% and silver by over 10%, amid escalating economic stress.

At the time of writing, gold was trading at $4,967 per ounce, up 1.21% over the past 24 hours.