Tokenized Gold Market Nears $3B as Bullion Hits New Record Highs – 30/9/2025

Gold-backed tokens surged in September as spot bullion broke past $3,800 per ounce, pushing trading volumes and market capitalization to new highs.

Tether’s XAUT and Paxos’ PAXG, the two leading tokenized gold assets, saw record monthly trading activity as gold extended its torrid 2025 rally, rising roughly 47% year-to-date. XAUT traded near $3,838, while PAXG touched $3,850, reflecting investor demand for digital representations of physical bullion.

On-chain activity mirrored the metals market: the combined market capitalization of gold-backed tokens climbed to $2.88 billion, according to CoinGecko. XAUT accounted for approximately $1.43 billion and PAXG around $1.12 billion at their respective peaks. Both tokens, backed by physical reserves but settled on blockchain networks, provide 24/7 trading and near-instant transfers, appealing to crypto and traditional investors alike.

Liquidity surged alongside the rally. Paxos’ PAXG saw more than $40 million in net inflows in September, with monthly trading volumes topping $3.2 billion. XAUT also recorded an all-time high of $3.25 billion in monthly turnover, according to DeFiLlama. Notably, XAUT’s market cap gains during the month were driven entirely by the rising price of gold, as no new tokens were minted in September after August’s $437 million issuance.

Macro conditions remain favorable for continued growth in tokenized gold. Investors are eyeing potential Federal Reserve rate cuts and a weaker U.S. dollar, while concerns over a possible U.S. government shutdown add to the appeal of gold as a safe-haven asset. Meanwhile, Bitcoin, often dubbed “digital gold,” has trailed with a 22% gain year-to-date.