Crypto investors are rushing into tokenized gold as digital asset markets tread water, sending flows into the Paxos gold token to a record high in January.
Paxos Gold (PAXG), backed by physical gold held in the LBMA vaults in London, has raised more than $248 million in fresh capital through January, according to data from DefiLlama. This brought PAXG’s market capitalization to over $2.2 billion, just behind .
The wave of inflows coincides with a meteoric rally for gold. The precious metal topped $5,300 an ounce on Wednesday, climbing 22% through January and gaining more than 90% over the past year. Meanwhile, Bitcoin slipped more than 10% in a year and the broader crypto market sank
This dynamic has shifted the focus of some crypto investors toward blockchain-based gold, seeking protection in an uncertain macroeconomic environment, said James Harris, CEO of crypto yield platform Tesseract Group.
“The growing appeal of tokenized gold has improved the utility of gold, particularly in terms of transferability and divisibility,” he said, “while bitcoin continues to trade more as a risk asset during times of macroeconomic uncertainty.”
Tokens like PAXG and XAUT offer fractional ownership of physical gold, with blockchain-based transfers and compatibility with crypto wallets. For investors, it’s a way to preserve a centuries-old store of value without the need for a safe.
The total tokenized gold market has now surpassed $5.5 billion, according to CoinGecko, marking an all-time high as inflows and gold prices push the sector to new heights.
