The undercurrent of "selling out of the US" is flowing into on-chain gold

Over the past year, gold has left little room for doubt.

In less than 12 months, gold prices have risen nearly 70%, marking one of the strongest annual performances in nearly half a century. Repeated geopolitical conflicts, persistent shadows of tariffs and trade frictions, a phased weakening of the US dollar, and bets on future rate cuts have collectively pushed gold back to the center of global asset allocation.

When institutions and retail investors alike are seeking safe-haven assets, gold is not a new answer.
The truly noteworthy change has occurred in the “carrying method” of gold exposure.

In traditional markets, funds flow into gold ETFs; meanwhile, in the crypto market, a previously inconspicuous corner is rapidly heating up—tokenized gold.

According to a research report by crypto exchange CEX.io, the trading volume of tokenized gold exploded in 2025, reaching approximately $178 billion for the year, with a single quarter’s trading volume exceeding $120 billion in Q4, already surpassing the trading volume of most traditional gold ETFs.

This is not just a price story, but a story of usage intensity. In other words:

The rise of gold does not “rediscover” tokenized gold, but makes the market realize that in the on-chain world, gold can be used more frequently and more efficiently.

From “holding” to “using”: what’s happening on the chain

If we only look at market capitalization, tokenized gold remains a relatively small market.

As of January 2026, the total market value of tokenized commodities (mainly gold) is about $4.5 billion, which is almost negligible compared to the global gold market. But if you focus on on-chain activity, the conclusion is entirely different.

According to the latest statistics from RWA.xyz, over the past 30 days, on-chain activity in the tokenized commodities sector has significantly accelerated: monthly transfer volume reached about $5.96 billion, an 82.69% increase month-over-month, clearly outpacing the 23% growth in market cap. Meanwhile, the number of monthly active addresses increased by 52.09%, while the number of holders grew only 9.42%.

This is a very typical signal. The difference in slopes between these indicators suggests that this round of growth is not primarily driven by an expanding holder base, but by increased participation depth and usage frequency. In other words, the market is not simply “attracting more people to hold,” but both existing and new participants are engaging in more frequent transactions and rebalancing of tokenized commodities, significantly increasing asset turnover speed.

In traditional finance, gold is a “low-frequency asset”; on the blockchain, it begins to exhibit a relatively “high-frequency” attribute.

To understand this change, one cannot solely attribute it to crypto adoption.

The macro environment at the beginning of 2026 is itself in an extremely delicate position:
On one hand, the narrative of falling inflation and AI-driven productivity gains continues; on the other hand, geopolitical frictions have not eased, the US dollar’s absolute safe-haven status is repeatedly discussed, and US stock valuations remain in historically extreme ranges.

This is not a time for “full risk-off,” but rather a phase of reluctance to exit but necessity to hedge.

In traditional markets, funds can hedge through futures, ETFs, and structured products; in the crypto market, if you don’t want to fully convert back to fiat, options are limited.

Stablecoins can avoid volatility but lack directionality;
Bitcoin has a long-term narrative but remains highly volatile in the short term;
Tokenized gold, conveniently, falls between the two.

It inherits gold’s safe-haven properties while also possessing on-chain assets’ 24/7 tradability, composability, and rapid rebalancing features. This is not “narrative innovation,” but a functional complement.

A Highly Concentrated Market

When we narrow our view, we find that the tokenized gold market is almost monopolized by two names: XAUt and PAXG.

This is not the “winner-takes-all” scenario common in the crypto world, but a result imposed by the real world.

Unlike ordinary tokens, the underlying assets of tokenized gold are not on-chain. Where the bars are stored, who custody them, whether they meet LBMA standards, how they are audited, and under what conditions they can be redeemed—none of these questions can be replaced by smart contracts.

For this reason, the market naturally tends to concentrate liquidity among a few issuers.
Not because they are “more decentralized,” but because they are more verifiable in the real world.

PAXG is issued by the regulated Paxos Trust Company, with gold custody meeting LBMA standards, and provides regular reserve and redemption disclosures; XAUt relies on Tether’s issuance and distribution system, quickly establishing scale and liquidity advantages.

As trading frequency increases, this difference is further amplified.
High-frequency usage requires depth, and depth ultimately depends on trust and compliance.

This is also why, during the explosive growth in trading volume over the past year, liquidity did not disperse but further concentrated at the top.

Who is buying on-chain gold? This is not just a simple retail safe-haven story

If we only consider “safe-haven” as the reason, it’s easy to attribute the demand for tokenized gold solely to retail sentiment. But from the perspective of on-chain structure and product attributes, the composition of market participants is actually more complex than imagined.

First, tokenized gold has indeed attracted some macro-sensitive funds. These funds do not necessarily exit the crypto market entirely, but in times of rising uncertainty, they seek assets that can significantly reduce portfolio volatility while remaining on-chain. For them, tokenized gold is more of a risk management tool than a directional bet.

Meanwhile, another force not to be ignored comes from trading and rebalancing funds. As on-chain usage frequency of tokenized gold increases significantly, it is gradually being used as an “intermediate asset” between stablecoins and high-volatility assets, for position switching, hedging, and liquidity management. This demand explains why transfer volume and activity growth are noticeably faster than the expansion of the holder base.

But ignoring retail investors’ role would be incomplete. Unlike many tokenized assets limited by accredited investor thresholds, gold tokens feature low barriers, divisibility, and no minimum investment amount. This allows individual investors to gain gold exposure with minimal capital, without the need for accounts, quotas, or regional restrictions in traditional finance.

This structural advantage makes tokenized gold especially attractive in emerging markets. In some regions, gold-related financial products are hard to access or costly; on-chain gold provides an almost frictionless alternative. Retail demand here is not for short-term speculation, but a natural allocation need for traditional assets like gold, once accessibility is improved.

Tokenized gold ≠ risk-free

It must be clear that tokenized gold is not a risk-free asset.

Its risks are not reflected in price but in counterparty and institutional structure.
All anchors ultimately rely on real-world custody, legal frameworks, and redemption chains to be fulfilled, and these chains can be impacted by regulation, sanctions, or operational shocks in extreme cases.

Furthermore, even top-tier assets still have limited liquidity compared to the global gold market. In the event of systemic shocks, the stability of the peg could still be under pressure.

This is why tokenized gold is better understood as an asset with a different risk profile, rather than an “absolutely safe asset.”

Until now, the crypto market has almost lacked a truly “system-internal safe haven tool.”

Now, for the first time, the market has an asset that can provide risk buffering and hedging without leaving the system.

When Bitcoin pulls back, stablecoin scale rises, and the trading activity of tokenized gold expands simultaneously, this divergence itself becomes a new risk thermometer.

Final Words

Gold has not changed; what has changed is the way this era needs it.

When Bridgewater’s Dalio issued a warning, suggesting that Trump’s policies could trigger “capital wars” and shake confidence in dollar assets, the market was already voting with its feet—gold is becoming the most direct expression of this expectation game.

This consensus is rapidly forming. UBS strategists recently said more directly: if the market continues to worry about the Fed’s independence, gold prices could challenge $5,000 in the first half of this year. Silver, copper, and other metals are also being re-priced along with gold in their respective supply and demand stories.

In an era where uncertainty persists but there is reluctance to fully exit, the market will ultimately choose tools that are most frictionless, easiest to use, and least costly to explain.

And on-chain gold just happens to stand at this story’s intersection.

Author: seed.eth