Flight to Safety: Tokenized Gold Surges Toward $2B Valuation Amid Global Trade Tensions

As crypto markets buckle under geopolitical pressure, one sector is quietly shining — quite literally. Tokenized gold, long touted as a bridge between traditional and digital finance, is gaining ground fast as investors seek refuge from the storm stirred by renewed U.S.-China trade tensions.

The market cap of gold-backed tokens jumped nearly 6% in just 24 hours, nearing the $2 billion mark on Wednesday, according to CoinGecko. The surge aligned with spot gold’s rally to a new high above $3,170 per ounce, reflecting a global rush to safety.

Trading activity has followed suit. Weekly volumes for tokenized gold topped $1 billion — the highest since the banking scare of early 2023 — signaling renewed demand for crypto assets with a tangible anchor. Paxos Gold (PAXG) and Tether Gold (XAUT), the two largest players, saw their volumes explode by 900% and 300% respectively since January 20, when Donald Trump was sworn in for his second presidential term.

PAXG alone absorbed over $63 million in net inflows during this period, according to DeFiLlama, as capital rotated away from more volatile crypto assets.

Even as gold dipped momentarily during Thursday’s broad sell-off, it quickly recovered and resumed its climb, highlighting its perceived strength in uncertain macro environments. Tokenized gold, meanwhile, is proving to be one of the most resilient digital asset classes of the year.

Since January, tokenized gold’s market cap has jumped 21%, dwarfing the 8% gain in stablecoins and standing in stark contrast to bitcoin’s 19% slide and the broader crypto market’s 26% loss, per a CEX.IO report.

“Gold-backed tokens are playing a critical role in portfolio hedging strategies,” said Alexandr Kerya, VP of Product at CEX.IO. “They combine the appeal of gold with the utility of blockchain — and that hybrid approach is paying off in turbulent times.”

Kerya also pointed to the growing interest in real-world asset (RWA) tokenization as a gateway for new investors: “Tokenized gold is no longer niche — it’s becoming a mainstream on-ramp for cautious capital entering the crypto space.”