Tether Gold's Meteoric Rise Dominates Tokenized Gold Market
Tether Gold (XAUT) has surged to the top of the tokenized gold market, accounting for two-thirds of the $237 million growth in the past month. The total market cap of tokenized gold assets now stands at between $5 billion and $6 billion, with XAUT and Paxos Gold (PAXG) dominating the market, collectively holding between 93% to 97% of the total.
Tokenized gold's growth outpaces physical gold holdings, with a 30% increase in Q1 2026. This growth is attributed to the convenience and accessibility of tokenized gold, which can be traded on-chain, around the clock, and used as collateral in DeFi protocols without waiting for a settlement cycle.
The competitive landscape shows Tether's dominance in both stablecoins and tokenized gold markets. Paxos Gold operates under New York state regulatory oversight, giving it an advantage over XAUT. The remaining market share is fragmented among smaller issuers, which face significant barriers to entry.