Cryptocurrency investors are piling into tokenized gold as digital asset markets stay afloat, causing inflows of Paxos gold tokens to hit a record high in January.
Paxos Gold (PAXG), backed by physical gold held in LBMA vaults in London, raised more than $248 million in fresh capital through January, DefiLlama data shows. That raised PAXG’s market capitalization to more than $2.2 billion, behind only .
The wave of inflows coincides with gold enjoying a dizzying rally. The precious metal crossed $5,300 per ounce on Wednesday, rising 22% through January and gaining more than 90% last year. Meanwhile, bitcoin has fallen more than 10% in a year and the overall crypto market sank
This dynamic has shifted the attention of some crypto investors toward blockchain-based gold, seeking protection in an uncertain macro environment, said James Harris, CEO of crypto yield platform Tesseract Group.
“The growing traction of tokenized gold has improved gold’s utility, particularly with regards to transferability and divisibility,” he said, “while bitcoin continues to trade more as a risk asset in periods of macro uncertainty.”
Tokens like PAXG and XAUT offer fractional ownership of physical gold, with blockchain-based transfers and support for crypto wallets. For investors, it’s a way to preserve a centuries-old store of value without needing a vault.
The total tokenized gold market has surpassed $5.5 billion, according to CoinGecko, marking an all-time high as both inflows and gold prices take the sector to new heights.
