Gold-backed tokens hit a major milestone this week, surpassing $1 billion in daily trading volume for the first time thanks to the yellow metal’s record rally.
Since the shutdown began on October 1, trading volume in tokenized gold commodities has surpassed $10 billion, surpassing that of BlackRock’s iShares Gold Trust (IAU), the world’s second-largest gold ETF, according to a new report from CEX.IO.
During the same period, the price of gold surged more than 10% in October, surpassing $4,300 an ounce, as escalating U.S.-China trade conflicts, a U.S. government shutdown and emerging signs of credit and liquidity strains in the financial system pushed investors toward the traditional safe-haven asset.
a blockchain-based crypto token backed by physical gold, accounted for 37% of all gold volume tokenized this month, up from 27% in the previous quarter, according to data shared by CEX.IO. Its number of holders also increased by more than 12%, outpacing competitors like Paxos Gold (PAXG), the report added.
Nonetheless, traditional ETFs still dominate in terms of total market size: the tokenized gold sector’s $3.3 billion market capitalization is tiny compared to the SPDR Gold Shares ETF (GLD)’s $141 billion and AIU’s $62 billion in assets under management.
However, tokenized gold stands out for the speed of trading. The volume to market capitalization ratio of tokenized gold is 34%, compared to 5.6% for GLD and 1.5% for IAU.
This speed suggests that investors are trading tokenized gold at a much higher rate than traditional gold instruments, with traders turning to 24-hour traded crypto tokens for active positioning and hedging against major risks, the report said.
“[This] reflects how tokenized gold is used not only as a store of value, but also as an active utility asset within the crypto ecosystem,” research analyst Illya Otychenko wrote in the report. “Investors appear attracted to its accessibility and ability to respond quickly to macroeconomic shocks, including tariff uncertainty and geopolitical tensions.”
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