The New Narrative of the $5000 Era: "The Old King" Returns, How to Understand the Tokenization Logic of Gold?

Writing: imToken

If a year ago, someone told you that gold would rapidly rise to $5000 per ounce, most people’s first reaction would probably be that it’s wishful thinking.

But the fact is, it happened. In just half a month, the gold market tore through multiple historical thresholds at $4700, $4800, and $4900 per ounce, and without looking back, it moved toward the $5000 mark that the market is collectively watching.

Source: companiesmarketcap.com

It can be said that after repeated validation of global macro uncertainties, gold has returned to its most familiar position—as a consensus asset that does not rely on any single sovereign promise.

But at the same time, a more realistic question is emerging: as the consensus on gold reemerges, are traditional holding methods already unable to meet the demands of the digital age?

1. The inevitability of macro cycles: “The Old King” returns to the throne

From a longer macro cycle perspective, this major upward cycle in gold is not short-term speculation but a structural reversion under the backdrop of macro uncertainties and a weakening dollar:

Geopolitical risks extend from Russia-Ukraine to key resource and shipping route regions in the Middle East and Latin America; the global trade system is repeatedly interrupted by tariffs, sanctions, and policy battles; U.S. fiscal deficits continue to expand, and the long-term stability of dollar credit is increasingly debated. In such an environment, the market will undoubtedly accelerate its search for a value anchor that does not depend on any single country’s credit and does not require external endorsement.

From this perspective, gold does not need to prove it can generate returns; it only needs to repeatedly prove one thing: that it still exists in times of credit uncertainty.

This also to some extent explains why, in this cycle, BTC—once expected to be “digital gold”—has not fully taken on the same consensus role. At least in the dimension of macro hedging, the market’s choice has already given an answer, which will not be elaborated here (see extended reading: “From Distrustful BTC to Tokenized Gold, Who Is the True ‘Digital Gold’?”).

However, the reemergence of gold consensus does not mean all problems are solved. After all, for a long time, investors could only choose between two imperfect holding methods.

The first is physical gold, which is sufficiently safe and sovereign-complete but almost lacks liquidity. Gold bars locked in safes mean high storage, theft, and transfer costs, and they are almost impossible to participate in real-time trading or daily use.

Recent phenomena of bank safes being “hard to find” in many places precisely illustrate this contradiction, indicating that more and more people want to hold gold in their own hands, but the reality often does not cooperate.

The second is paper gold or gold ETFs, which to some extent compensate for the physical holding threshold of physical gold. For example, paper gold products issued by banks or brokerages are essentially claims on financial institutions, providing a settlement promise backed by the account system.

But the problem is, this liquidity itself is not thorough—what paper gold and gold ETFs offer is liquidity locked within a single financial system. They can be bought and sold under certain banks, exchanges, or clearing rules but cannot freely circulate outside that system.

This means they cannot be split, combined, or integrated with other assets across systems, let alone be directly used in different scenarios. They are merely “in-account liquidity,” not true asset liquidity.

For example, the author’s first gold investment product, “Tencent Micro Gold,” was like this. From this perspective, paper gold has not truly solved the liquidity problem of gold; it only temporarily replaced the inconvenience of physical form with counterparty credit.

Ultimately, safety, liquidity, and sovereignty are long-term difficult to achieve simultaneously. In a highly digitalized and cross-border era, such trade-offs are becoming increasingly unsatisfactory.

It is against this background that tokenized gold has begun to enter more people’s view.

2. Tokenized gold: Restoring “full liquidity” to the asset itself

Represented by XAUt (Tether Gold) issued by Tether, tokenized gold aims to solve not just the superficial problem of “making gold easier to hold/trade,” which paper gold can also do, but a more fundamental question:

How to enable gold to gain the same, cross-system transferable, fully liquid, and composable properties as crypto assets without sacrificing its “real gold backing”?

Taking XAUt as an example, analyzing its design logic reveals that it is not radical but rather quite traditional and restrained: each 1 XAUt corresponds to 1 ounce of physical gold stored in a London vault, which is auditable and verifiable. Holders of the tokenized gold have a claim on the underlying gold.

This design does not involve complex financial engineering nor attempts to amplify gold’s properties through algorithms or credit expansion. Instead, it deliberately respects traditional gold logic—first ensuring the physical backing, then discussing the digital transformation.

Ultimately, tokenized gold like XAUt and PAXG is not about “creating a new gold narrative” but about re-encapsulating the oldest asset form using blockchain technology. In this sense, XAUt is more like a “digital real gold” rather than a speculative derivative in the crypto world.

Meanwhile, a more significant change is the fundamental shift in the liquidity layer of gold. As mentioned above, in the traditional system, whether paper gold or ETFs, the so-called liquidity is essentially in-account liquidity—it exists within a bank, a broker, or a clearing system, and can only be bought and sold within predefined boundaries.

XAUt’s liquidity, however, is directly attached to the asset itself. Once gold is mapped as an on-chain token, it inherently possesses the basic properties of a crypto asset: it can be freely transferred, split, combined, and circulated across different protocols and applications without needing permission from any centralized authority.

This means that gold no longer relies on “accounts” to prove its liquidity but exists as an asset in its own right, capable of free circulation 24/7 worldwide (see extended reading: “The ‘Godfather of Gold’ debates CZ: Who Is the ‘Digital Gold’? A Trust Battle Crossing TradFi and Crypto”). In the on-chain environment, XAUt is no longer just a “tradeable gold token” but a fundamental asset unit that can be recognized, invoked, and combined by other protocols:

• It can be exchanged freely with stablecoins and other assets;
• It can be incorporated into more complex asset allocation and portfolio strategies;
• It can even serve as a value carrier in consumption and payment scenarios;

This is precisely the part of “liquidity” that paper gold has never been able to provide.

3. From “On-Chain” to “Usable”: The true watershed for digital real gold

Therefore, if tokenized gold only completes the “on-chain” step, it is far from reaching the endpoint.

The real watershed lies in whether this “digital real gold” can be easily held, managed, traded by users, and even used as a “currency” for consumption and payments. Returning to the earlier point, if tokenized gold merely remains a string of code on the chain, ultimately encapsulated within centralized platforms or single entry points, then it is no different from paper gold.

Against this backdrop, lightweight self-custody solutions like imToken Web are beginning to show their significance. Taking imToken Web as an example, it allows users to access via browser—like opening a webpage—instantly managing their tokenized gold and other crypto assets on any device.

In a self-custody environment, users fully control their private keys. Your gold does not exist on any service provider’s server but is truly anchored in blockchain addresses.

Moreover, thanks to the interoperability of Web3 infrastructure, XAUt is no longer a dormant metal in a safe. It can be used flexibly for small purchases, and when needed, tools like imToken Card can enable real-time deployment of gold’s purchasing power into global consumption scenarios.

Source: imToken Web

In short, in a Web3 environment, XAUt can be traded, combined, exchanged with other assets, and even connected to payment and consumption scenarios.

When gold first possesses both high store-of-value certainty and modern usability potential, it truly completes the leap from “old-fashioned safe haven” to “future currency.”

After all, gold, as a consensus that can span thousands of years, is not inherently outdated; what is outdated is only the way it is held.

Thus, when gold in the form of XAUt enters the chain and is re-claimed by individuals through environments like imToken Web, it is not a new narrative being continued but a timeless logic:

In an uncertain world, true value is about relying as little as possible on others’ promises.