Paxos gold token posts all-time inflows as traders pivot to the yellow metal.

Tokenized gold is seeing renewed demand from crypto investors as digital asset markets lose momentum, driving record January inflows into Paxos’ gold-backed token.

Paxos Gold (PAXG), which is fully backed by physical bullion held in LBMA-approved vaults in London, drew more than $248 million in net inflows during the month, according to DefiLlama data. The influx pushed PAXG’s market capitalization above $2.2 billion, second only to Tether Gold (XAUT).

The surge comes as gold continues a strong rally. The metal climbed past $5,300 per ounce on Wednesday, up 22% in January and more than 90% over the past year. By contrast, bitcoin has fallen more than 10% over the same period, with the broader crypto market also under pressure.

That divergence is prompting some crypto investors to rotate into blockchain-based gold as a defensive play amid heightened macro uncertainty, said James Harris, chief executive of crypto yield platform Tesseract Group.

“Tokenized gold has meaningfully improved gold’s utility, particularly in terms of transferability and divisibility,” Harris said. “Bitcoin, meanwhile, continues to behave more like a risk asset during periods of macro stress.”

Products such as PAXG and XAUT offer fractional ownership of physical gold, allowing investors to transfer exposure on-chain and store it in crypto wallets. The structure provides access to a traditional store of value without the challenges of physical custody.

The overall market capitalization of tokenized gold has now exceeded $5.5 billion, according to CoinGecko, reaching a record high as strong inflows and rising gold prices push the sector to new levels.