CZ Dubs Gold Tokens a ‘Trust Me Bro’ Asset as Market Cap Climbs to $3.9B

Gold-Backed Tokens Reach $3.86B as CZ Questions Their Reliability

As gold prices stabilize near $4,100 per ounce following recent highs, gold-backed tokens are seeing a surge in adoption—but not without skepticism.

According to CoinGecko data, the total market capitalization of gold tokens has climbed to $3.86 billion, led by XAUT ($4,148.53) and Paxos Gold (PAXG).

Yet Binance co-founder and former CEO Changpeng Zhao (CZ) cautioned investors on X, emphasizing the risks of trusting third parties. “Tokenizing gold is NOT ‘on-chain’ gold,” he wrote. “It relies on trusting someone to deliver gold later—perhaps decades from now, under uncertain circumstances, or even during crises.”

This dependence on centralized issuers mirrors concerns long associated with stablecoins, whose value is pegged to currencies like the U.S. dollar. A recent NYDIG report noted that even dollar-pegged tokens such as USDC and USDT can temporarily lose their peg during extreme market stress.

During the recent $500 billion crypto market sell-off, for instance, Ethena’s USDe fell as low as $0.65 on Binance, while USDC and USDT remained near $1.

While gold tokens may appear attractive as a hedge, the risks remain real. “It’s a ‘trust me bro’ token,” CZ added, highlighting why no gold-backed coin has truly gained widespread adoption.

Even the largest token, Tether Gold, holds a market cap of just $2.1 billion—far smaller than its dollar stablecoin counterpart USDT at $183 billion—underscoring the gap between promise and adoption in this sector.

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