[Coin Report] Gold Coins Reverse Trade in Bear Market: Funds Fleet from Coins to Gold

As international gold prices continue to hit record highs, analysts are suggesting funds are flowing out of the cryptocurrency market and into gold. While cryptocurrencies in general are weakening, "tokenized gold," a digitalized version of physical gold using blockchain technology, is lone among them, continuing its growth.

According to CoinMarketCap, a global market monitoring site, as of 3:40 PM on the 5th, most of the top 10 virtual assets by market capitalization, excluding Bitcoin (BTC) and stablecoins, have fallen by around 3% over the past week. Bitcoin fell below $110,000 at one point early this morning, but is currently trading at around $111,600, up slightly by 0.45% from a week ago. This is over 10% lower than its all-time high recorded just over 20 days ago.



Conversely, gold prices surpassed $3,600 per ounce, setting a new all-time high. This is attributed to the increased market uncertainty caused by US President Donald Trump's tariff policy confusion, which fueled a preference for safe-haven assets. While the New York stock market rebounded on expectations of a September interest rate cut by the Federal Reserve, the virtual asset market struggled, leading some to assess that investment funds are shifting to gold.

Blockchain media outlet Cointelegraph reported that “as the U.S. labor market indicators fell short of expectations, investors are flocking to Treasury bonds and gold,” and predicted that “in the short term, risk aversion could push Bitcoin down to $108,000 again.”

Coinciding with the gold price rally amidst the weakness of cryptocurrencies, tokenized gold is rapidly gaining traction. Tokenized gold converts physical gold into blockchain-based digital tokens. The issuer stores the gold in a physical vault and issues tokens equivalent to the amount on the blockchain. Investors can store the tokens in their cryptocurrency wallets and trade them 24 hours a day, and they can also be exchanged for physical gold under certain conditions. The ability to purchase in fractional amounts makes it more accessible than traditional gold investments, and the inherent transparency of blockchain technology enhances transaction transparency.

According to CoinGecko on this day, the total market capitalization of tokenized gold surpassed $2.6 billion (approximately KRW 3.6155 trillion) for the first time ever. This represents a near doubling from the $1.4 billion (approximately KRW 1.9468 trillion) level just five months ago. Notably, Pax Gold (PAXG), the largest cryptocurrency by market capitalization, surpassed $1 billion (approximately KRW 1.3904 trillion) for the first time on this day, more than doubling its value from $473.68 million (approximately KRW 658.6 billion) a year ago. Tether Gold (XAUt), ranked second, also reached a market capitalization of nearly $900 million (approximately KRW 1.2513 trillion), a 50% increase from a year ago.

However, in Korea, real-world assets (RWAs) like tokenized gold remain hampered by institutional uncertainty. Concerns remain over the interpretation of securities status, as a related bill containing criteria for determining tokenized securities (ST) is pending in the National Assembly. Consequently, the only tokenized gold project in Korea, "Bidan (formerly Sengold)," is limited to indirect support through the purchase of exchange vouchers rather than allowing investors to directly trade tokenized gold on the platform. Overseas product listings are also cautious. Among domestic exchanges, PAXG is the only one traded on the Korean Won markets of Bithumb, Coinone, and Korbit.

Reporter Kim Jeong-woo