Disclaimer:
This post is just a thought experiment — the numbers could be wildly off.
I could be missing critical factors.
I’m just trying to explore what might happen based on a few basic ideas around supply, demand, and human nature.
Setting the Stage
Right now, gold trades around $3,500 an ounce, and the total value of all the gold in the world is estimated at about $23 trillion.
Meanwhile, a small but interesting trend is starting: tokenized gold — digital tokens (like PAXG or XAUT) backed 1:1 with physical gold stored in vaults.
Today, tokenized gold is tiny — only about $1.4 billion.
But what happens if tokenized gold really takes off — not overnight, but gradually over many years?
What if it follows a similar adoption curve as stablecoins, and eventually draws in trillions of dollars?
Could tokenized gold reshape the gold market — and drive gold to prices few people today are expecting?
Why Tokenized Gold Matters
Gold has always been an incredible store of value, but it’s slow, bulky, and expensive to store securely.
Tokenized gold removes almost all of those frictions:
- Global access: anyone can buy it instantly.
- Fractional ownership: you don’t need to buy a full ounce.
- Digital portability: move it around the world in seconds.
In a world where stablecoins like USDT and USDC are already handling hundreds of billions of dollars of value, it’s not hard to imagine tokenized gold also gaining serious traction — especially if trust in fiat currencies continues to decline.
A Possible Growth Trajectory
Let’s imagine a slow but accelerating adoption curve:
- Today: ~$1.4 billion tokenized gold
- In 3 years: ~$10 billion
- 5 years: ~$50 billion
- 7 years: ~$250 billion
- 10+ years: ~$1 trillion+
- Farther out: maybe $5 trillion or even $10 trillion
If tokenized gold becomes as normal and widely held as stablecoins are today, the market could become several trillion dollars, not just one.
The Supply Problem
Even though the total value of all gold is $23 trillion, only a small slice is ever available for sale at any time.
Most gold is:
- Locked up in central bank vaults
- Stored long-term by investors
- Owned as jewelry and heirlooms
Maybe 5% to 15% of gold is actively traded — roughly $1–3 trillion.
So if tokenized gold demand reaches $1 trillion or more, it’s not small potatoes — it’s competing against a huge chunk of the real liquid gold market.
In that situation, gold prices wouldn’t just slowly drift upward — they could accelerate rapidly as buyers chase fewer and fewer willing sellers.
How the Price Might Move
At first, with a few tens of billions of tokenized demand entering the market, gold might rise modestly — from $3,500 to $4,000–5,000 an ounce.
But as tokenized demand climbs toward hundreds of billions, then trillions, gold could move into a whole new regime:
- Early years: Gradual grind higher
- Mid phase: Steady climb into $7,000–10,000/oz
- Late phase: Acceleration toward $15,000–20,000/oz or even higher
That said, it’s important to recognize that as gold prices rise significantly, more traditional gold sellers will be tempted to cash out — jewelry owners, mining companies, and even some central banks could see high prices as a selling opportunity.
This new selling pressure could moderate price spikes somewhat, creating pauses or corrections along the way, before any new surges.
The path upward wouldn’t be a straight line — more like a staircase of surges and pullbacks.
From Tokens to Physical Gold
Another important possibility:
Tokenized gold demand could eventually convert into physical gold demand.
Today, people are happy to hold tokenized gold for speed, liquidity, and trading.
But if people start thinking longer-term — saving gold for decades, preserving family wealth — many will prefer physical, professionally stored gold to eliminate any digital or custodial risks.
If this shift happens at scale:
- Physical gold demand would spike even more.
- Available liquidity would shrink further.
- Prices could go far beyond anyone’s forecasts.
Physical gold, when stored securely and professionally, carries less technology risk than digital assets — it can’t be hacked, frozen, corrupted by software, or impacted by hardware failures.
In chaotic or unstable times, this simplicity becomes a major advantage.
What About Bitcoin?
Some might argue that Bitcoin will outcompete tokenized gold.
Maybe.
Bitcoin could continue to grow and thrive alongside tokenized gold — capturing the purely digital, decentralized store-of-value narrative.
Or Bitcoin could struggle, for a few reasons:
- Regulatory crackdowns targeting crypto infrastructure
- Technological vulnerabilities (especially with the rise of powerful quantum computers that could eventually crack Bitcoin’s cryptography unless it is upgraded)
- Custodial hacks or loss of private keys (since Bitcoin is purely digital and fundamentally exposed to digital risks)
- Competition from government-backed digital currencies (CBDCs)
- Changes in public trust if the network faces a major crisis
Physical gold doesn’t carry these digital-specific risks:
- It can’t be hacked.
- It doesn’t rely on encryption.
- It’s immune to quantum computing breakthroughs.
If Bitcoin faces serious headwinds, tokenized and physical gold could absorb much of the capital fleeing riskier digital assets.
On the other hand, if Bitcoin successfully navigates these risks, it could grow alongside tokenized gold — with Bitcoin serving the ultimate decentralization narrative, and gold providing tangible, timeless stability.
Either way, tokenized gold is well positioned in a world moving steadily toward hard, scarce, and real assets.
Final Thoughts (and Final Disclaimer)
Once again —
I don’t know the future.
The numbers here could be dramatically wrong.
New technologies, regulations, or shifts in financial behavior could change everything.
But if the world continues trending toward:
- More digital money
- More distrust of fiat
- More demand for real, scarce assets
- More concern over technology risk
…then tokenized gold could grow from a niche experiment into a multi-trillion-dollar pillar of the global financial system.
And if that happens, today’s gold price of $3,500 an ounce might someday seem astonishingly cheap.
Just something to think about.
Bonus: Digital Gold vs. Dollar Stablecoins (and a New Gold Standard?)
One final point to consider: while U.S. Treasury-backed dollar stablecoins (like USDC, USDT) are growing fast, they come with a major issue — their supply is theoretically infinite.
New stablecoins can be minted endlessly, limited only by the availability of Treasury collateral, which itself is backed by a government with no hard cap on its debt.
In contrast, gold is finite. The global physical supply grows slowly over time through mining, but it is inherently limited by nature. While “paper gold” (derivatives, rehypothecated gold) can create synthetic supply temporarily, real physical gold cannot be printed or conjured the way digital dollars can.
There’s another critical difference: gold is one of the only truly neutral world reserve assets. It belongs to no government, no corporation, and no nation-state. Unlike the dollar, which is a tool of U.S. policy and debt issuance, gold is recognized globally as money — and has been for thousands of years.
As tokenized gold grows and digitizes access to this neutral store of value, it’s possible the world could move, little by little, back toward a gold standard — not through government decree, but through organic market preference for something truly scarce, tangible, and apolitical.
In a future of unstable fiat and endless debt issuance, gold — both physical and digital — may once again become the backbone of global finance.
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