Gold's sharp decline: risk or opportunity? In-depth analysis of the emerging trend of "tokenized gold".

Gold has rebounded to around $5,000.

Since January 2025, gold prices have successively broken through the three major psychological barriers of $3,000, $4,000, and $4,500, and surged to $5,600 in early 2026, outperforming most asset classes globally within half a month. However, the narrative driving the current gold price surge is showing signs of weakening—the policy stance of the new Federal Reserve Chairman has sparked speculation about higher interest rates being maintained for a longer period; the potential strengthening of the US dollar and US Treasury yields is putting direct pressure on non-interest-bearing gold; and the short-term easing of geopolitical risks has also weakened some safe-haven demand, with market sentiment shifting from greed to caution.

Will gold continue to rise? Should we continue buying? In the long run, the core logic driving gold's rise has not dissipated. The global trend of de-dollarization and central bank foreign exchange reserve diversification continues to deepen, and central banks around the world (especially in emerging markets) have been net buyers of gold for several consecutive years, which has built a solid structural buying base for gold prices. High global debt, fragmented geopolitical landscape, and future economic uncertainty have made gold's ultimate safe-haven attributes and value anchoring function increasingly prominent.

Looking back at the gold bull markets of the late 1970s and after 2008, there were sharp corrections exceeding 20% ​​along the way. However, these corrections ultimately became "refueling stations" in the bull market, not the final destination. In a truly strong cycle, sharp drops often complete the risk release in a short period of time, washing out weak positions, and then, driven by stronger long-term buying, the market regroups and reaches new highs.

Gold is still a worthwhile investment, but the experience of buying gold remains stuck in the last century.

Why put gold on a blockchain?

Traditional physical gold investment is usually a long and "heavy" chain. Investors often need to go through a series of cumbersome steps, such as going to a compliant institution to purchase, paying the full amount, arranging high-risk physical transportation themselves, and finally purchasing a safe deposit box or leasing a bank safe deposit box to ensure storage security.

This model clearly has significant room for improvement. First, the operating hours of physical markets limit trading flexibility and cannot cover the 24/7 fluctuations in global gold prices. Second, the storage and delivery of physical gold is not only complex and time-consuming, but also involves fixed storage and insurance costs. Third, traditional gold bars are difficult to divide, and the high investment threshold excludes many small investors with fragmented allocation needs. Furthermore, traditional offline transactions suffer from weak record-keeping and insufficient transparency; settlement delays and counterparty credit risk remain persistent concerns.

To address the challenges of liquidity and storage associated with physical gold, products like gold ETFs have provided investors with efficient trading tools through securitization. Now, tokenized gold products like XAUt are further expanding the boundaries of digital gold by leveraging blockchain technology. Compared to gold ETFs, tokenized gold offers native on-chain programmability, 24/7 global circulation, and near-infinite divisibility, allowing for more flexible integration into DeFi and other scenarios. It's important to note that tokenized gold is not a replacement for traditional tools, but rather provides investors with a complementary next-generation option in terms of programmability, 24/7 liquidity, and segmented usage.

Comparison Table of Key Differences between Tokenized Gold, Traditional Physical Gold, and Gold ETFs

Unlike traditional ETFs, gold tokens are not simply securitized price certificates, but rather on-chain, strictly 1:1 proof of ownership of physical gold. This means that token holders are not merely betting on price fluctuations, but truly own the gold in a vault. Under certain conditions, investors can even directly withdraw the physical gold, something most ETFs cannot do. An even more crucial breakthrough lies in "activation": traditional gold lies static in a vault, but gold tokens can circulate on the blockchain. They can integrate into the DeFi ecosystem, generating interest through collateralization, lending, and other methods, transforming gold from a static store of value into a "living asset" with interest-bearing capabilities.

Ultimately, the core value of gold tokenization lies in perfectly resolving the contradictions between physical gold holding, liquidity, and financialization. Previously, investors faced a choice: either buy physical gold and endure the hassle of storage, or buy ETFs and relinquish direct control of the asset. Gold tokenization opens a third path: investors can enjoy the security of ownership of physical gold while also gaining financial returns and better liquidity through blockchain networks. For high-net-worth individuals who value both asset security and capital efficiency, this model, which balances a "physical foundation" with "digital returns," represents the optimal solution for future asset allocation.

Traditional financial choices

The tokenization of gold is not a one-sided frenzy in the crypto industry, but rather a result of the traditional gold industry's proactive digital transformation.

The London Bullion Market Association (LBMA) officially launched its Gold Bar Integrity Index (GBI) database in January 2025. Utilizing blockchain technology, the LBMA has achieved full lifecycle traceability for gold bars, from mining and refining to warehousing. As of December 2025, all refineries on the eligible delivery list have joined the database. This transformation signifies a shift in the underlying logic of the global physical gold market from "paper certificates" to "digital fingerprints," providing an indisputable physical basis for the large-scale tokenization of gold.

Major banks are also entering the fray. In London, HSBC has used distributed ledger technology to granularize physical gold in vaults, transforming heavy gold bars into digitally transactable certificates. In Singapore, DBS and Standard Chartered are piloting cross-border clearing based on tokenized gold through platforms such as Libera. Through smart contracts, banks can instantly convert gold assets into trading collateral, reducing cross-border clearing time from days to minutes, fundamentally reshaping the efficiency of gold as a global medium of liquidity.

These facts demonstrate that the ecosystem infrastructure for tokenized gold has matured. It is no longer just a concept, but a mature tool connecting traditional finance and digital markets. Currently, global gold pricing power is still mainly concentrated in London and New York, but under the major trend of "gold shifting from the West to the East," the Asian market, as the world's main consumption center for physical gold, is seeking to "leapfrog" through digital means. The tokenization of gold is one of the engines accelerating this process.

How can I own "tokenized gold"?

Against this backdrop, Hong Kong's compliant virtual asset market has taken a significant step forward. According to an official disclosure by HashKey Holdings Limited (3887.HK) , its first licensed retail virtual asset exchange in Hong Kong , HashKey Exchange, has launched Tether Gold (XAUt) . Currently, professional investors can trade directly through HashKey Exchange's over-the-counter (OTC) trading platform and its wealth management channel.

Today, through the compliant hub of HashKey Exchange, investors can seamlessly convert between fiat currency, stablecoins, and gold assets without leaving the regulatory framework. In the context of limited trading hours in traditional financial markets, gold tokens supporting 24/7 trading offer the market a more flexible and capital-efficient asset allocation path, responding more flexibly to macroeconomic events. Through tokenization, gold has expanded from an asset primarily held physically and used as a long-term store of value to an asset that can circulate and be used within the digital financial system. This reduces allocation friction costs, while the security of asset custody and transactions is significantly enhanced thanks to HashKey's licensing system.

HashKey Exchange's wealth management channel is committed to building a diversified asset allocation matrix within a secure and transparent regulatory framework. Currently, the channel has successfully covered core investment products such as money market funds (MMFs) and commodities, and continues to accelerate the on-chain process of high-quality assets.

On a deeper level, these products respond to Hong Kong's policy ambitions in promoting RWA (Real Estate Tokenized Assets). They not only provide a standardized security template for the on-chaining of traditional assets, but also guide a new investment paradigm—allowing investors to enjoy the convenience of digital finance without worrying about compliance or underlying clearing in extreme market conditions. For investors seeking stable and efficient assets, choosing this type of compliant tokenized gold aligns with the trend of digital transformation in Asia and represents the optimal path to asset returns in a volatile era.