Tokenized gold is drawing increased interest from crypto investors as digital asset markets stall, pushing inflows to Paxos’ gold-backed token to a record high in January.
Paxos Gold (PAXG), which is backed by physical bullion stored in LBMA-approved vaults in London, attracted more than $248 million in net inflows during the month, according to DefiLlama data. The surge lifted PAXG’s market capitalization above $2.2 billion, second only to Tether Gold (XAUT).
The inflows coincide with a sharp rally in gold prices. The precious metal climbed above $5,300 per ounce on Wednesday, gaining 22% in January and more than 90% over the past year. Over the same period, bitcoin has fallen more than 10%, while the broader crypto market has also weakened.
That divergence has led some crypto investors to rotate toward blockchain-based gold as a hedge against macroeconomic uncertainty, said James Harris, CEO of crypto yield platform Tesseract Group.
“The increasing adoption of tokenized gold has enhanced gold’s utility, particularly through improved transferability and divisibility,” Harris said. “At the same time, bitcoin continues to trade more like a risk asset during periods of macro stress.”
Tokenized gold products such as PAXG and XAUT offer fractional ownership of physical bullion, enabling on-chain transfers and compatibility with crypto wallets. The structure allows investors to gain exposure to gold without the need for physical storage.
The total market capitalization of tokenized gold has now surpassed $5.5 billion, according to CoinGecko, marking an all-time high as rising demand and higher gold prices lift the sector.
About The Author
More Stories
Bitcoin drops under $71,000 while stocks end the day near session lows as expectations for a 2026 Fed rate cut dim further.
Fed pauses rate changes as the Iran conflict clouds the economic outlook and fuels inflation fears.
Cheap money is now behind us as ongoing conflict with Iran locks in a higher baseline for inflation.