Risk Assets, Including Cryptocurrencies, Underperform Amid Tariff Policy Uncertainty; Tokenized Gold Sees Market Value Growth
Risk assets, including cryptocurrencies, have recently underperformed due to uncertainties surrounding tariff policies, while gold has once again become a safe haven for investors during turbulent times, leading to an increase in the market value of tokenized gold.
According to data from CoinGecko, the total market capitalization of tokenized gold has reached $2.03 billion, rising by 4.5% in the past 24 hours, coinciding with spot gold prices breaking new highs of over $3,200 per ounce. Although gold was not spared during the widespread market sell-off triggered by increased tariffs in the U.S., temporarily dropping by 6%, it quickly rebounded to set a new historical high.
As prices soar and the overall market remains volatile, gold-backed tokens, which anchor the value of gold, have seen significant trading activity and demand in recent weeks. According to a report by digital asset platform CEX.IO, the weekly trading volume of tokenized gold has surpassed $1 billion, marking the highest record since the turmoil in the U.S. banking sector in March 2023.
The report cites data from CoinGecko, indicating that since January 20, the weekly trading volume of the two major gold tokens, Paxos Gold (PAXG) and Tether Gold (XAUT), has surged by over 900% and 300%, respectively, capturing a substantial share of the tokenized gold market. Data from DefiLlama shows that PAXG recorded a total of $63 million in consecutive inflows during this period.
CEX.IO’s report states that since the inauguration of U.S. President Donald Trump, tokenized gold has been one of the best-performing assets in the cryptocurrency space, with its market capitalization increasing by 21%. In contrast, the market cap of stablecoins has only risen by 8%, while Bitcoin has declined by 19%, leading to an overall shrinkage of the cryptocurrency market by 26%.
Source: CEX.IO
CEX.IO Vice President of Product Management Alexandr Kerya stated:
Kerya added, “At the same time, the broader RWA narrative (referring to the tokenization of real-world assets) makes exposure to gold more understandable and accessible for users who may have never considered it.”