Amid ongoing market instability driven by global tariff tensions, gold-backed crypto tokens are proving their value as digital safe-haven assets.

According to CoinGecko, the total market capitalization of tokenized gold climbed to nearly $2 billion on Wednesday — a 5.7% gain in just 24 hours. This rise closely tracked physical gold, which hit an all-time high of over $3,170 per ounce as traditional markets reacted to the latest escalation in U.S.–China trade tensions.

Tokenized gold has outperformed the broader crypto market in recent weeks. A new report from digital asset platform CEX.IO notes that since President Trump’s January 20 re-inauguration, gold-backed tokens have gained 21% in market cap. In comparison, stablecoins are up 8%, while Bitcoin and the total crypto market have dropped 19% and 26%, respectively.

The sector’s surge has been accompanied by soaring trading activity. Weekly trading volumes for tokenized gold surpassed $1 billion — levels not seen since the 2023 U.S. banking scare. Paxos Gold (PAXG) and Tether Gold (XAUT), the two dominant tokens in this space, have experienced volume increases of 900% and 300%, respectively. PAXG also saw net inflows of $63 million over the same time frame, according to DeFiLlama.

While Thursday’s broader sell-off briefly pulled gold lower, the metal quickly rebounded, reaffirming its role as a market hedge. That momentum is translating directly into demand for tokenized equivalents as investors look to maintain crypto exposure while minimizing volatility.

“Tokenized gold is increasingly viewed as a smart hedge for portfolios rooted in digital assets,” said Alexandr Kerya, VP of Product at CEX.IO. “It offers investors a way to preserve capital in turbulent markets without needing to exit the crypto ecosystem entirely.”

Kerya also emphasized the role of real-world asset tokenization in broadening crypto adoption: “The growth of tokenized gold illustrates the power of blockchain to modernize access to traditional assets and meet investor demand for transparency, liquidity, and security.”

As geopolitical tensions continue to influence asset flows, tokenized gold could remain a key pillar in the digital flight to safety.