TLDR
- The tokenized gold market hit a record $2.88 billion market cap on September 29 as spot gold prices surged past $3,800 per ounce
- Tether Gold (XAUT) and PAX Gold (PAXG) both recorded over $3.2 billion in monthly trading volume during September
- PAXG attracted $40 million in net inflows during the month while reaching an all-time high market cap of $1.12 billion
- Gold has gained 47% year-to-date compared to Bitcoin’s 22% return over the same period
- Federal Reserve rate cut expectations, inflation concerns, and potential US government shutdown drove gold’s rally
The tokenized gold market reached a new all-time high on September 29, with total market capitalization climbing to $2.88 billion. The milestone came as spot gold prices broke through $3,800 per ounce, setting fresh records.
Tether Gold (XAUT) and PAX Gold (PAXG) dominate the tokenized gold space. These tokens are backed by physical gold reserves but trade on blockchain networks. XAUT’s market cap stood at $1.43 billion while PAXG reached $1.12 billion, both at record levels.
Trading activity surged across both tokens during September. PAXG recorded monthly trading volume exceeding $3.2 billion, marking a new high for the token. XAUT matched this performance with $3.25 billion in monthly volume.
Strong Inflows Drive PAXG Growth
PAXG attracted more than $40 million in net inflows throughout September. The inflows accompanied the token’s rising market cap. XAUT’s market cap growth came entirely from gold price appreciation, as no new tokens were minted during the month.
This contrasts with August when XAUT saw $437 million in new token creation. The tokens offer round-the-clock trading and near-instant transfers. Both XAUT and PAXG are issued by companies primarily known for their stablecoin products.
Gold’s price rally accelerated throughout the month. The precious metal gained roughly 47% year-to-date by late September. This performance outpaced Bitcoin, which returned 22% over the same period.
Fed Policy and Economic Concerns Fuel Rally
Several factors drove gold prices higher in September. Investor expectations for Federal Reserve interest rate cuts increased. Inflation pressures continued to weigh on markets.
Concerns about a potential US government shutdown added to economic uncertainty. These conditions created a favorable environment for gold. A softer US dollar outlook also supported precious metal prices.
Tokenized versions of gold provide an alternative to traditional bullion investment. The blockchain-based tokens settle transactions instantly. They enable 24-hour trading access, unlike physical gold markets with set hours.
The two leading tokens maintain their positions through different approaches. XAUT focuses on organic market cap growth through price appreciation. PAXG combines price gains with active token minting to meet demand.
Data from DeFiLlama tracked the volume and market cap metrics for both tokens. CoinGecko provided overall market capitalization data for the tokenized gold sector. Both sources confirmed the record levels reached on September 29.
The tokenized gold market represents a growing segment of cryptocurrency. Physical gold reserves back each token on a one-to-one basis. Issuers store the bullion in secure vaults and provide regular attestations.
