Tokenized Gold vs. Real Gold: Which One Actually Works Harder for Your Money?
Written by
Travis Woods
Edited by
Jenna Klaverweiden
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Despite gold’s recent surge to record levels beyond $5,000 an ounce, a new gold competitor has emerged: tokenized gold.
So what exactly is tokenized gold, and how does it compare with real gold?
Also see the best gold exchange-traded funds to watch right now.
What Is Tokenized Gold?
Tokenized gold is exactly what it sounds like — digital tokens. Specifically, digital tokens traded, settled and deployed on blockchains but backed in value by real, physical gold. Recently, the market for these tokens has surged, with values rocketing past $3 billion thanks to investors seeking liquidity, 24/7 access and easy transferability, per Crypto News.
This digital iteration of gold begs the question: Which one actually works harder for your money, real gold or tokenized gold?
Real vs. Tokenized: A Gold Breakdown
Real gold is, of course, a true and time-tested bulwark against inflation and various geopolitical shocks and shifts. Conversely, though, it doesn’t truly yield — it can appreciate, but typically real gold sits idle unless it’s sold.
Tokenized gold, however, allows investors to use it as collateral to borrow stablecoins or to earn fees by providing liquidity on decentralized exchanges. Additionally, tokenized gold grants broadened access to more than just high net worth holders, thanks to fractional ownership and potential for instant settlement. That’s a structural difference that matters: Tokenized gold transforms an inert asset (real gold) into a yield-bearing profit system within blockchain ecosystems.
The Bottom Line
In the end, though, the choice between tokenized gold and real gold depends on each individual investor’s goals.
Those who seek a low-tech hedge against geopolitical tumult likely will find that real gold best suits their needs. However, those investors looking to increase yield, boost liquidity and have access to digital finance could pursue tokenized gold’s modern twist on the precious metal.
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