Offbeat Ideas and Commentary from the Depths of Gil's Trading Notes
Bitcoin promoters like to call King Crypto digital gold, but in my view it is far from it. Others have tried to paint Bitcoin as a better version of gold, the alleged replacement for an outmoded and old-fashioned pet rock. VoSI members who have been around for a while know that I do not view crypto and gold as being at odds with one another. In fact, I have viewed crypto technology, e.g., blockchain technology, as the perfect partner for gold. Gold is the traditional hard asset that exists well beyond the fiat-printing paper currency fetishes and capabilities of global central banks, and blockchain is what allows it to flow freely in smaller increments, allowing accessibility to those who cannot afford to buy one-ounce coins at $4400 a pop, and to potentially earn interest within the overall financial system and structure.
Some points I have culled from the internet to consider:
Global Developments in Tokenized Gold, which represents physical gold reserves as digital tokens on blockchain platforms, has seen significant growth and adoption worldwide in recent years, particularly accelerating in 2024 and 2025. This trend is part of the broader rise in tokenized real-world assets (RWAs), where assets like gold are digitized to enable easier trading, fractional ownership, and integration with decentralized finance (DeFi) systems. Key developments include:
- Market Growth and Valuation Surge: The overall tokenized RWA market exploded from $8.6 billion in early 2025 to over $23 billion by year-end, driven by compliant multi-chain infrastructure and increasing institutional interest. Specifically for gold, tokenized gold-backed stablecoins approached $4 billion in market capitalization in late 2025, fueled by a 66% year-to-date rise in gold prices and growing demand for on-chain safe-haven assets. This represents a small but rapidly expanding portion of the broader RWA market, currently accounting for about 1% of it, with Wall Street predicting gold as the next major frontier for tokenization.
- Trading Volume Milestones: Tokenized gold achieved record trading volumes in 2025, with cumulative volumes exceeding $10 billion in certain quarters, surpassing activity from early in the year. By Q3 2025, daily trading volumes for leading tokenized gold products like Tether Gold (XAUT) and Paxos Gold (PAXG) topped $1 billion, overtaking traditional gold exchange-traded funds (ETFs) in activity.
- Institutional and Governmental Adoption: Tokenization is shifting to an institutional and governmental scale, transforming global finance by enabling seamless cross-border trading of assets like gold. Central banks continued bolstering physical gold reserves (adding over 1,000 tonnes in 2023-2024), viewing tokenized versions as a complementary hedge in a post-crisis world, amid competition from digital assets like Bitcoin. In the U.S., regulatory progress in 2025 included SEC roundtables on tokenization and proposed exemptions, addressing past uncertainties that slowed adoption. Globally, stablecoins (including gold-backed ones) dominated the tokenized asset space, comprising over 91% of the market in 2024, with expectations for continued expansion into 2025.
- Broader RWA Context: Excluding stablecoins, tokenized RWAs grew over 60% from $8.4 billion at the end of 2023 to $13.5 billion by December 2024, setting the stage for 2025 as a pivotal year for tokenization, including gold. This growth spans regions like Europe (via Deutsche Bank's research focus) and emerging markets, where blockchain infrastructure is enabling new financial models. These advancements reflect a convergence of traditional finance with blockchain technology, with gold tokenization gaining traction in Asia, Europe, and North America through platforms like Paxos and Tether.
- Advantages of Tokenized Gold. Tokenizing gold offers several benefits over traditional physical gold ownership, making it more appealing for investors, especially in volatile economic conditions. Here are the primary advantages:
- Fractional Ownership and Accessibility: Investors can purchase small fractions of gold (e.g., portions of a gold bar), lowering the entry barrier and allowing participation based on budget rather than requiring full bars or coins. This democratizes access, enabling broader global participation without the high costs of physical storage or transport.
- Enhanced Liquidity and 24/7 Trading: Tokenized gold can be traded around the clock on blockchain networks, providing instant ownership transfers and greater flexibility compared to traditional markets that close on weekends or holidays. This boosts overall liquidity, making it easier to buy, sell, or convert gold without geographical restrictions.
- Reduced Storage and Security Risks: Unlike physical gold, which requires secure vaults and insurance, tokenized versions eliminate storage needs and associated risks like theft or loss, while blockchain provides transparent, immutable records.
- Instant Settlement and Efficiency: Transactions settle in real-time, avoiding delays common in traditional gold trades, which can take days. This also enhances transactional transparency through blockchain's auditable ledger.
- Integration with DeFi and Broader Use Cases: Tokenized gold can be used in DeFi applications for lending, borrowing, or yield farming, adding utility beyond mere holding. However, it introduces some tech-related risks, such as reliance on platforms and potential cyberattacks, though these are mitigated by blockchain security.
Gil Morales
December 19, 2025