Tokenized gold trading exploded in 2025, with industry data showing roughly $178 billion in volumes for the year, a 1,550% year-on-year jump that outpaced most major spot gold ETFs. The surge coincided with a sharp price rally: spot gold was trading near $4,748.71 per ounce, up about 9.6% in the first 20 days of the year.
Tokenized gold’s market capitalization rose by 177% in 2025 to more than $4.4 billion, accounting for nearly a quarter of reported growth in the broader real-world asset (RWA) tokenization market. Dominant issuers drove much of that activity: one provider captured about 75% of fourth-quarter trading volume, underscoring concentration within the tokenized sector.
Several macro factors accompanied the flows. Geopolitical tensions and safe-haven demand, expectations of Federal Reserve rate cuts, and a weakening U.S. dollar were cited as primary drivers of bullion’s rally. Major banks have adjusted their price targets accordingly: UBS analysts including Dominic Schnider projected a swift move toward $5,000 per ounce by Q1 2026, while other institutions have outlined even higher long-term scenarios.
Market participants have pointed to tokenized gold’s features — 24-hour liquidity, fractional ownership and lower settlement friction — as reasons retail and some institutional investors shifted capital on-chain. The tokenized format has also seen growing use as collateral inside decentralized finance (DeFi) applications, creating additional on-chain utility that traditional ETFs cannot match.
Structure, risks and market implications
The tokenized gold market’s rapid expansion has practical implications for liquidity, custody and market structure. On-chain liquidity reduces traditional settlement frictions and can speed entry and exit compared with some ETF processes. At the same time, concentrated issuance and the migration of collateral functions into DeFi raise operational and risk questions for participants accustomed to regulated, custodial frameworks.
Investors should weigh trade-offs: tokenized products offer accessibility and round-the-clock tradability, but concentration of volume, reliance on custodial reserves and integration with DeFi amplify counterparty and protocol risks. The acceleration in tokenized market cap — roughly 2.6 times the growth rate of physical bullion in 2025 — suggests investor demand is reallocating, not merely supplementing, legacy channels.
For market professionals, the immediate impact is twofold: enhanced intraday liquidity for gold exposure and a need to reassess custody, audit and settlement arrangements when comparing tokenized instruments with ETFs and physical holdings.
Investors are now watching Q1 2026 closely, when the gold price trajectory toward $5,000 will be tested by incoming macro data and any shifts in monetary policy — a test that will also reveal whether tokenized channels can sustain their outsized share of trading during a stress episode.
