As the traditional gold futures markets take a weekend hiatus, tokenized gold assets like PAX Gold (PAXG) and Tether Gold (XAUt) step in to lead the way in price discovery. According to Iggy Ioppe, former chief investment officer at Credit Suisse and now CIO at liquidity infrastructure firm Theo, these digital assets become the primary venues for gold trading during the weekend.
The Weekend Shift to Tokenized Gold
CME gold futures trading halts at 5:00 PM ET on Fridays and resumes at 6:00 PM ET on Sundays. During this period, most trading activity in traditional markets is limited to private over-the-counter deals, which are not publicly reported. This leaves tokenized gold as the only continuously visible trading platform, making it crucial for price formation.
“In terms of publicly visible price formation, onchain markets are responsible for virtually 100% of weekend price discovery,” Ioppe told Cointelegraph. He noted that when CME reopens, prices often reflect the movements that occurred on blockchain markets.
Growth in Tokenized Gold
The tokenized gold market has seen significant growth over the past year. The market capitalization of tokenized gold has surged from about $1.6 billion to $4.4 billion, a 177% increase. This growth outpaces the broader gold market and most major spot gold ETFs, with the number of holders nearly tripling to over 115,000 new wallets.
Trading activity in tokenized gold has also surged, with volumes reaching about $178 billion in 2025, peaking above $126 billion in the fourth quarter. This level positions tokenized gold as the second-largest gold investment product globally by trading volume, just behind SPDR Gold Shares.
Role of Market Makers and Crypto-Native Traders
Market makers and cross-venue liquidity providers dominate participation in the tokenized gold market, arbitraging price differences between digital and traditional markets. Crypto-native macro traders also play a significant role, using tokenized gold for exposure to bullion prices, collateral, hedging, and yield strategies during periods of geopolitical or macroeconomic uncertainty.
“Some institutions are monitoring weekend onchain gold markets, particularly macro and cross-asset desks that track gap risk ahead of the CME reopen,” Ioppe said, noting that most institutions use these signals for informational purposes rather than active positioning.
Risk Management and Geopolitical Events
The continuous trading nature of tokenized gold markets provides a practical risk management tool. If a geopolitical event occurs while traditional markets are closed, investors can immediately rebalance their portfolios. For example, on a recent Saturday, tokenized gold rallied as tensions escalated following U.S. and Israeli strikes on Iran. XAUT and PAXG saw increased activity, with XAUT briefly climbing above $5,450 and PAXG nearing $5,536 before trimming gains.
Challenges and Future Outlook
Despite its advantages, tokenized gold faces challenges, including smaller liquidity compared to futures or ETFs, which can make large trades more difficult without moving prices. Regulatory clarity is improving, but jurisdictional fragmentation remains a hurdle for broader institutional adoption. “Regulatory clarity is improving, but fragmentation across jurisdictions slows institutional deployment. Custody, accounting, and capital rules still vary widely,” Ioppe explained.
For now, tokenized gold is expected to coexist with traditional products rather than replace them. “The most likely near-term evolution is that of tokenized and traditional markets existing in parallel, each serving a different function,” Ioppe concluded.
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