Gold Token Market Tops $3.9B as CZ Calls Them ‘Trust Me Bro’ Assets
While gold prices have eased from record highs to around $4,100 per ounce, crypto tokens pegged to the precious metal are gaining attention. The total market capitalization of gold tokens has reached approximately $3.86 billion, driven by strong performance from XAUT ($4,144) and Paxos Gold (PAXG), according to CoinGecko.
However, Binance co-founder and former CEO Changpeng Zhao (CZ) warned that these tokens are only as secure as the promise behind them.
“Tokenizing gold is NOT ‘on-chain’ gold,” CZ wrote on X. “It’s trusting a third party to deliver gold at some later date — potentially decades later, after management changes, or even during a war.”
This dependence on centralized issuers exposes similar risks to those seen in stablecoins, whose value is pegged to fiat currencies like the dollar. A report from NYDIG notes that even well-established stablecoins such as USDC and USDT can lose their peg under extreme market conditions. During the recent $500 billion crypto sell-off, Ethena’s USDe briefly fell to $0.65, while USDC and USDT remained above $1.
Tokenized gold, while appealing as a hedge, carries hidden risks that investors should weigh carefully.
“It’s a ‘trust me bro’ token,” CZ added. “This is why no gold coins have truly taken off.”
Even the largest gold token, Tether Gold (XAUT), has a market cap of $2.1 billion, compared with USDT at $183 billion, highlighting the disparity between gold-backed and dollar-pegged crypto assets.
