Gold Is Now More Profitable Than Crypto! But Investors Are Shifting to Decentralized Gold

As global markets grapple with ongoing economic turbulence, one asset class is proving its timeless appeal once again Gold. But this time, it’s not just the traditional yellow metal that’s making headlines. 

Digital forms of gold, often referred to as decentralized gold, are surging in popularity, giving investors a powerful new way to preserve wealth. With Gold ETFs posting strong inflows and crypto markets struggling, the spotlight has shifted to tokenized gold assets like PAXG and XAUT.

Gold Beats Crypto in 2025 Performance

So far in 2025, gold has proven to be more profitable than traditional crypto assets. While Bitcoin and Ethereum have seen double digit losses, tokenized gold assets like Paxos Gold (PAXG) and Tether Gold (XAUT) have gained over 23%. These digital tokens are backed by real physical gold, providing both price stability and the speed of blockchain based trading.

In contrast, the crypto market has struggled amid increased geopolitical tensions and volatile macroeconomic indicators. According to the CoinDesk 20 Index, the overall crypto market is down by more than 30% year to date. This makes tokenized gold an increasingly attractive option for investors seeking safer havens.

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What’s Driving the Shift Toward Tokenized Gold?

One of the biggest advantages of tokenized gold is that it combines the strength of physical gold with the flexibility of digital assets. Tokens like PAXG and XAUT are directly backed by gold reserves stored in secure vaults. This provides peace of mind for investors, as each token represents a specific amount of real world gold.

More importantly, these tokens can be traded 24/7 across global crypto exchanges. Unlike traditional gold, which requires brokers and physical delivery, tokenized gold offers instant liquidity and lower barriers to entry. This combination is drawing both traditional and crypto native investors.

Gold ETFs See Record Inflows

Traditional Gold ETFs are also experiencing a revival. In Q1 2025, Gold ETFs saw inflows totaling 226.5 tonnes, the highest quarterly figure in three years, according to the World Gold Council. North American investors made up nearly 60% of that demand, signaling a renewed appetite for safer, more stable assets.

With economic uncertainty fueled by rising US China trade tensions and fluctuating inflation rates, investors are pivoting from riskier assets to gold related options. And it’s not just large institutions making the shift—retail investors are also participating through tokenized gold platforms.

Token Minting Surges to Meet Demand

Supporting this surge is a wave of new token issuance. Over $42.7 million worth of tokenized gold was minted in Q1 2025 alone, according to RWA.xyz, pushing the total market cap of gold backed tokens to nearly $1.4 billion.

This spike in minting reflects rising demand for decentralized gold. As traditional and crypto markets continue to face downward pressure, tokenized gold offers an alternative that’s gaining serious traction.

Read also : Tether Is Planning Something New in 2025! Rumours Spreading of New Strategies Implemented

The Future of Gold and Crypto: A Hybrid Approach?

As tokenized gold continues to outperform, the question becomes: is this the future of asset preservation? With traditional Gold ETFs gaining institutional interest and decentralized gold attracting crypto savvy investors, we may be witnessing a merging of two investment worlds.

The fusion of physical asset stability with blockchain efficiency provides a compelling case for long term adoption. Investors no longer need to choose between gold and crypto; they can now hold both in one token.

Final Thoughts

In 2025, gold has not only outperformed crypto but has also adapted to the digital age through tokenization. The rise of Gold ETFs and tokenized assets like PAXG and XAUT suggests a broader market trend: investors want stability, but they also crave speed and accessibility.

As the lines between traditional finance and digital assets blur, tokenized gold may just become the go to investment for those seeking the best of both worlds.

FAQ

What is tokenized gold and how does it work?

Tokenized gold refers to digital assets like PAXG and XAUT that are backed 1:1 by physical gold stored in secure vaults. These tokens allow investors to gain exposure to the value of real gold while enjoying the speed and liquidity of cryptocurrency trading.

Why are investors choosing gold over crypto in 2025?

Due to global economic uncertainty and recent market volatility, gold has outperformed most crypto assets in 2025. Both traditional Gold ETFs and tokenized gold have become attractive options for investors seeking stability and long term value.

Are Gold ETFs and tokenized gold the same thing?

Not exactly. Gold ETFs are traditional investment vehicles traded on stock exchanges, representing shares backed by gold. Tokenized gold, on the other hand, is a blockchain based asset that also represents physical gold but offers faster, decentralized trading with lower barriers to entry.