The New Narrative in the $5,000 Era: The 'Old King' Returns—How to Understand the Logic of Gold Tokenization?

If someone had told you a year ago that gold would quickly rise to $5,000 per ounce, most people's first reaction would likely have been disbelief.

But that is precisely what happened. In just half a month, the gold market has surged like a runaway horse, successively breaking through multiple historical barriers at $4,700, $4,800, and $4,900 per ounce, heading almost non-stop towards the $5,000 moment collectively anticipated by the market.

Source: companiesmarketcap.com

It can be said that after global macroeconomic uncertainties have been repeatedly validated, 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: With the return of the gold consensus, are traditional methods of holding it no longer sufficient to meet the demands of the digital age?

I. The Inevitability of the Macro Cycle: The "Old King" Returns to the Throne

From a longer macro cycle perspective, this round of gold's major bull market is not short-term speculation, but a structural return against a backdrop of macroeconomic uncertainty and a weakening US dollar:

Geopolitical risks have extended from Russia-Ukraine to key resource and shipping lane regions like the Middle East and Latin America; the global trade system has been repeatedly disrupted by tariffs, sanctions, and policy games; the US fiscal deficit continues to expand, and the long-term stability of the US dollar's credit is being discussed with increasing frequency. In such an environment, the market will undoubtedly accelerate its search for a value anchor that does not rely on any single country's credit and requires no endorsement from others.

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

This also explains, to some extent, why BTC, once hailed as "digital gold," has not fully assumed the same consensus role in this cycle—at least in the dimension of macro hedging, capital flows have provided the answer, which we won't elaborate on here (Extended reading: From Trustless BTC to Tokenized Gold: Who is the True "Digital Gold"?).

However, the return of the gold consensus does not mean all problems are solved. For a long time, investors have had to choose between two imperfect ways of holding gold.

The first is physical gold. It is secure enough and sovereign, but almost completely lacks liquidity. Locking gold bars in a safe means high storage, security, and transfer costs, and it also means they can hardly participate in real-time trading or daily use.

The recent phenomenon of "safe deposit boxes in short supply" in many places' banks precisely illustrates this contradiction is intensifying. It means more and more people want to hold gold in their own hands, but practical conditions don't always cooperate.

The second is paper gold or gold ETFs, which to some extent compensate for the physical holding barriers of physical gold. For example, paper gold products issued by bank accounts or brokerage systems are essentially a claim on a financial institution, giving you a settlement promise backed by the account system.

But the problem is that this liquidity itself is not complete—what paper gold and gold ETFs provide is liquidity locked within a single financial system. It can be bought and sold within a specific bank, exchange, or clearing rule set, but cannot freely circulate outside that system.

This means it cannot be split, combined, or collaborate with other assets across systems, let alone be used directly in different scenarios. It is merely "in-account liquidity," not true asset liquidity.

Take the author's first gold investment product, "Tencent Micro Gold," as an example. From this perspective, paper gold does not truly solve gold's liquidity problem; it merely temporarily replaces the inconvenience of physical form with counterparty credit.

Ultimately, security, liquidity, and sovereignty have long been in a state where they are difficult to achieve simultaneously. In a highly digitalized and cross-border era, such trade-offs are becoming increasingly unsatisfactory.

It is precisely against this backdrop that tokenized gold is beginning to enter more people's field of vision.

II. Tokenized Gold: Returning "Full Liquidity" to the Asset Itself

Tokenized gold, represented by XAUt (Tether Gold) issued by Tether, attempts to solve not just the surface-level problem of "making gold easier to hold/trade," which paper gold can also address, but a more fundamental proposition:

How can gold achieve the same complete, cross-system transferable liquidity and composability as crypto assets, without sacrificing its "physical gold backing"?

If we take XAUt as an example and dissect its design logic, we find it is not radical; in fact, it is quite traditional and restrained: each XAUt token corresponds to 1 ounce of physical gold stored in a London vault. The physical gold is stored in professional vaults, is auditable and verifiable, and tokenized gold holders have a claim on the underlying gold.

This design does not introduce complex financial engineering, nor does it attempt to amplify gold's attributes through algorithms or credit expansion. On the contrary, it deliberately maintains respect for the traditional gold logic—first ensuring the physical gold attribute is established, then discussing the changes brought by digitization.

In essence, tokenized gold like XAUt and PAXG is not about "creating a new gold narrative," but about repackaging the oldest asset form using blockchain. In this sense, XAUt is more like "digital physical gold" than a speculative derivative in the crypto world.

But at the same time, the more important change lies in the fundamental shift in gold's liquidity tier. As mentioned above, in the traditional system, whether paper gold or gold ETFs, the so-called liquidity is essentially in-account liquidity—it exists within a specific bank, brokerage, or clearing system and can only be bought, sold, and settled within established boundaries.

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

This means gold, for the first time, no longer relies on an "account" to prove its liquidity. Instead, in the form of the asset itself, it circulates freely globally, 24/7 (Extended reading: "Gold Godfather" Debates CZ: Who is the "Digital Gold"? A Trust Battle Spanning TradFi and Crypto). In the on-chain environment, XAUt and similar tokens are no longer just "tradable gold tokens," but basic asset units that can be recognized, invoked, and combined by other protocols:

• It can be freely exchanged 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, participating in consumption and payment scenarios;

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

III. From "On-Chain" to "Usable": The True Watershed for Digital Physical Gold

For this reason, if tokenized gold only completes the step of "going on-chain," it is far from reaching the finish line.

The true watershed lies in whether this "digital physical gold" can truly be easily held, managed, traded, and even used as "currency" for consumption and payments by users? In other words, returning to the point mentioned above: if tokenized gold remains merely a string of code on the chain, ultimately encapsulated within a centralized platform or a single entry point, then it is no different from paper gold.

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

Furthermore, in a self-custody environment, the private key is entirely controlled by the user. Your gold does not exist on any service provider's server but is genuinely anchored in a blockchain address.

Additionally, thanks to the interoperability of Web3 infrastructure, XAUt is no longer a heavy metal sleeping in a safe. It can be purchased flexibly in small amounts as an asset and, when needed, its purchasing power can be released in real-time into global consumption scenarios through payment tools like the imToken Card.

Source: imToken Web

In short, in the Web3 environment, XAUt can not only be traded but also combined with other assets, exchanged, and even connected to payment and consumption scenarios.

And when gold, for the first time, simultaneously possesses extremely high value storage certainty and modern usage potential, it truly completes the leap from an "old-school safe-haven asset" to a "future currency."

After all, gold, as a consensus that has spanned millennia, is not inherently outdated; what is outdated is merely the way of holding it.

Therefore, when gold enters the chain in the form of XAUt and returns to personal control through self-custody environments like imToken Web, what it continues is not a new narrative, but a logic that transcends eras:

In an uncertain world, true value lies in relying as little as possible on the promises of others.