Gold-backed tokens hit a major milestone this week, topping $1 billion in daily trading volume for the first time on the back of the yellow metal’s record rally.
Since the start of the shutdown on October 1, tokenized gold products’ trading volume has topped $10 billion, surpassing BlackRock’s iShares Gold Trust (IAU), the world’s second-largest gold ETF, according to a new report from CEX.IO.
In the same window, the price of gold rose over 10% in October, topping $4,300 per ounce. ounce, as escalating trade between the US and China, the US government shutdown and new signs of credit and liquidity stress in the financial system pushed investors towards the traditional haven.
a blockchain-based crypto token backed by physical gold, accounted for 37% of all tokenized gold volume this month, up from a 27% share in the previous quarter, according to data shared by CEX.IO. Its holder count also rose by more than 12%, outperforming rivals such as Paxos Gold (PAXG), the report added.
Yet traditional ETFs still dominate overall market size: the $3.3 billion market cap of the tokenized gold sector is small compared to the SPDR Gold Shares (GLD) ETF’s $141 billion and the IAU’s $62 billion in assets under management.
However, tokenized gold stands out in trading speed. Tokenized Gold’s volume-to-market cap ratio is 34%, compared to GLD’s 5.6% and IAU’s 1.5%.
This speed suggests that investors are trading tokenized gold at a pace much higher than legacy gold instruments, with traders turning to crypto tokens traded around the clock for active positioning and hedging against overall risks, the report said.
“[This] reflects how tokenized gold is used not only as a store of value, but as an active utility asset within the crypto ecosystem,” research analyst Illya Otychenko wrote in the report. “Investors appear to be attracted to its accessibility and ability to respond quickly to macro shocks, including tariff uncertainty and geopolitical tensions.”
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