Digital gold is shining with an unprecedented brilliance. The total market capitalization of tokenized gold has surpassed the $3 billion mark, setting a historical record and marking a milestone in the integration of traditional safe-haven assets with blockchain technology. On October 7, 2025, this market's total capitalization reached $3.02 billion, growing by 2.3% in the past 24 hours, indicating a clear acceleration in investor demand for digital assets backed by physical gold. Tether's XAUT and Paxos' PAXG dominate the scene, accounting for a combined 89% market share: XAUT has a market cap of approximately $1.51 billion (49.5%), while PAXG stands at $1.21 billion (39.6%). This wave of enthusiasm is not just a digital game; it is a perfect collision of a gold bull market with blockchain, showcasing new ways to engage with safe-haven assets. With gold prices breaking the $4,000 per ounce mark for the first time, the trading volume of tokenized gold surged to $640 million, and market sentiment is high. Platforms like OKX have stated that this marks the arrival of a "new currency era," with the influence of fiat currency gradually waning.

1. Market Data Overview

The table below summarizes the key indicators of major tokenized gold on October 7, 2025, visually displaying the market landscape:

Token Name

Market Cap (in billions)

Market Share

24-Hour Trading Volume (in billions)

Year-to-Date Growth Rate

XAUT

1.512

49.5%

0.232

53.6%

PAXG

1.212

39.6%

0.380

53.4%

Market Total

3.02

100%

0.612

Data Source: AiCoin Official Website

Trading activity is booming, with the total exceeding $3 billion, primarily driven by retail investors and experienced crypto investors. The number of holders is also expanding, with XAUT growing over 150% and PAXG increasing by 25%, indicating a more solid foundation. These numbers are not mere talk; they are concrete signals proving that tokenized gold is moving from the margins to the mainstream.

2. Gold Bull Market and Digital Demand

The strong performance of the gold market provides a solid foundation for tokenized gold. Since 2025, gold prices have risen nearly 47%, once breaking the key psychological barrier of $4,000 per ounce. This trend is driven by multiple macro factors: geopolitical conflicts boosting safe-haven sentiment, global central banks continuing to purchase gold (with purchases reaching 1,180 tons in 2024), and expectations of a shift towards looser monetary policy. Against this backdrop, investors are seeking innovative tools that combine the traditional value of gold with the liquidity of the crypto market, making tokenized gold an ideal choice.

The tokenization of real-world assets (RWA) is the core engine driving market growth. Through blockchain technology, physical gold stored in secure vaults is transformed into on-chain tokens, achieving the triple advantages of enhanced liquidity, revenue opportunity exploration, and credible anchoring of physical assets. This model effectively connects traditional finance with decentralized finance, attracting a significant influx of institutional and retail funds.

The Ethereum ecosystem dominates this field. According to Token Terminal data, the total amount of tokenized gold on the Ethereum chain is approximately $2.4 billion, with a year-to-date increase of about 100%. If we include layer two networks like Polygon, Ethereum's share in the tokenized commodity market reaches as high as 77%, with a broader share of 97%. Additionally, Ethereum accounts for over 70% of the tokenized U.S. Treasury market, becoming the second-largest on-chain asset class after private credit, highlighting its leading position as RWA infrastructure.

3. Institutional Participation and Market Maturity

The entry of institutional investors has significantly enhanced market depth and compliance. As of September 2025, the total trading volume of major tokenized gold products XAUT and PAXG has surpassed $3.2 billion. The two tokens have formed differentiated complementary strategies in regulatory approaches and user positioning:

● PAXG is regulated by the New York Department of Financial Services, providing monthly audited reserve reports, with over 74,000 holders, primarily retail investors;

● XAUT relies on a Salvadoran licensing framework, with quarterly reserve certifications conducted by BDO Italia, and enhances flexibility through multi-chain deployment (covering Ethereum, Tron, Arbitrum, etc.), focusing more on the decentralized market.

The holder structure of tokenized gold also reflects its institutionalization process: institutional investors account for 40%, surpassing Bitcoin's 30%. Recent RWA ETF applications submitted by traditional asset management giants like BlackRock and Fidelity further inject confidence into the market, driving a large influx of funds.

4. Future Prospects and Challenges

Despite the rapid growth of tokenized gold, its overall scale still lags behind traditional gold ETFs (such as SPDR Gold Shares). However, its high trading volume, low entry barriers, and retail participation have proven its potential as an alternative to traditional gold holdings. The market generally expects that by 2026, the market value of tokenized gold may exceed $5 billion, benefiting from gold price fluctuations and the rising narrative of RWA.

However, challenges cannot be ignored.

Regulatory Pressure: The EU's MiCA regulations will be implemented in 2025, requiring stricter KYC processes and transparency in stablecoin reserves, which may increase compliance costs;

Traditional Competition: Mainstream gold ETFs still dominate the market, and tokenized products need to prove their long-term stability;

Technical and Custodial Risks: Potential risks from centralized custodians, the security of cross-chain bridges, and the reliability of the 1:1 anchoring of on-chain assets to physical gold remain focal points of market concern.

The sustainable development of tokenized gold depends on achieving a balance between technological innovation and transparency. As the World Gold Council points out, digitization is not just a technological upgrade but an opportunity to "redefine the boundaries of gold"—transforming gold from a traditional store of value into a modern asset that can earn interest and circulate within the DeFi ecosystem. This transformation may be a significant prelude to the evolution of future monetary systems.

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