Tokenized gold, a digital representation of the precious metal, is gaining traction over traditional paper gold alternatives such as exchange-traded funds (ETFs), thanks to several compelling advantages. This trend is particularly underscored by Gold DAO, a decentralized autonomous organization keen on revolutionizing how investors access gold. Representatives Melissa Song and Dustin Becker highlight three pivotal benefits: 1:1 redeemability, utility as collateral in DeFi, and enhanced transactional efficiency.
The Gold Rush: Digital Edition
In a conversation with Cointelegraph, Song emphasized a critical distinction. “When you buy an ETF, you are betting on the gold price going up, but you do not own any specific gold bar,” she pointed out. This lack of tangible ownership in ETFs makes tokenized gold an attractive proposition, especially when the market is experiencing turbulence. And turbulent it is—gold prices skyrocketed in 2025, peaking at $3,500 per ounce in April, fueled by macroeconomic uncertainties and geopolitical tensions. This rally reflects a global pivot towards safe-haven assets, as conventional markets stumble under the weight of protectionist trade policies.
A Changing Landscape
The surge in gold prices didn’t happen in isolation. According to TradingView, these peaks coincided with trade tariffs imposed by former President Donald Trump, which sent ripples through risk-on asset markets like stocks and cryptocurrencies. Investors, it seems, are hedging their bets by flocking to gold and gold-backed digital tokens such as Paxos Gold (PAXG) and Tether Gold (XAUT). The price of these digital assets surged in tandem with traditional gold, highlighting a broader acceptance and reliance on tokenized commodities. This trend mirrors Tether’s strategic moves, as detailed in Tether Finalizes Buying 70% of Adecoagro Stake, Securing Tokenization Ambition.
Max Keiser, a vocal Bitcoin advocate, suggests that gold-backed tokens could potentially overshadow fiat stablecoins. “A stablecoin backed by gold would out-compete a USD-backed stablecoin in world markets,” Keiser noted in a March post, drawing attention to the geopolitical neutrality and inflationary resistance of gold. This sentiment is particularly resonant as the U.S. dollar faces mounting skepticism over its long-term purchasing power.
The Implications for Crypto
The implications of this gold rush extend beyond just bullion and digital tokens. There’s speculation that Bitcoin, often viewed as digital gold, might also benefit from this shift. As investors reassess Bitcoin’s role—not just as a speculative risk asset but as a store of value—its appeal could widen. Should this perception take hold, Bitcoin might emerge as a counter-cyclical asset, offering stability amidst economic upheavals. This shift is part of a broader trend in the DeFi space, as seen in the Tokenized Apollo Credit Fund Makes DeFi Debut With Levered-Yield Strategy by Securitize, Gauntlet.
While these developments are promising, they also invite questions about sustainability. Can tokenized gold maintain its allure in a volatile market? What are the potential pitfalls in its integration with DeFi platforms? And how will regulatory landscapes adapt to this rapidly evolving sector?
In this age of economic uncertainty, the traditional allure of gold combined with the innovative potential of blockchain technology presents a fascinating intersection. As we navigate through 2025, one thing is clear: the conversation around gold—both physical and digital—is far from over. The narrative continues to unfold, with investors watching closely, ready to pivot as new dynamics emerge.
Source
This article is based on: Why tokenized gold beats other paper alternatives — Gold DAO
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
