Amid the Crypto Market Correction, the Rush for Gold Will Change

During the market upheaval in October 2025, investors’ attention is turning to new places. Gold, which has served as a safe-haven asset during economic crises in traditional financial markets, has now begun to take a similar position in the cryptocurrency market. It’s not just a move of assets, it’s a sign of the maturity of the decentralized finance (DeFi) ecosystem.

In mid-October, the cryptocurrency market underwent a broad correction. While common cryptocurrency and DeFi assets fell by about 11% during the same period, assets in the on-chain commodities sector increased by a surprising 5%. More notably, from a long-term perspective, on-chain commodities surged 27% in the month of October. At the heart of this growth is the unprecedented demand for tokenized gold.

Gold Rush in Market Correction

In the past, when the market was unstable in the DeFi ecosystem, investors’ options were very limited. Most had no other way but to move to stablecoins or secure liquidity like cash. However, the rise of on-chain gold means that this situation is changing.

According to the data, the total assets of the on-chain gold sector have exceeded $2.4 billion to $2.6 billion. This is the combined market capitalization of major gold tokens such as Tether Gold and Paxos Gold. Compared to January at the beginning of the year, the value of tokenized gold has more than tripled, from $1 billion to more than $3 billion.

The actual gold market is showing a similar trend. The price of gold, which was $2,624 per troy ounce in early January, rose to $4,065 through November. The macro environment of global political instability and a weak US dollar has fueled significant demand for gold, particularly among Asian central banks, and this phenomenon has spread into the cryptocurrency realm.

Gold in DeFi, the True Value of Tokenization

The mere fact that gold has entered the chain is not enough to deserve attention. What really matters is what these assets can do in an on-chain environment.

The growth rate of the DeFi RWA (Real Asset Representative Token) sector illustrates this well. It grew by 132% from $7.09 billion at the beginning of the year to $16.42 billion in mid-November, while the overall DeFi sector grew by only 4.5% during the same period. This means that RWA is currently the strongest growth driver in the DeFi ecosystem.

On-chain gold is particularly prominent because it offers value beyond mere price tracking capabilities. In traditional finance, gold can only be bought and sold: basic activities. However, tokenized gold in DeFi can be used to:

First, it can be used as collateral for loans and borrowing. This means that tokenized gold can be presented as collateral and liquidity can be secured. In addition, just like LP tokens earned when participating as liquidity providers, gold tokens can also be utilized as a tool to generate additional income in various protocols. This means that through yield farming, a structure can be formed that allows you to earn additional profits in addition to the underlying assets.

It can also be used as a collateral asset or vault asset for the protocol, and can also serve as a foundational asset for complex financial strategies. This possibility of composability is the transformative value of on-chain assets.

Entry of Institutional Investors and Changes in the Industry

It’s no coincidence that giants like BlackRock and Franklin Templeton are entering the DeFi and RWA sectors in droves. Because they recognize the same opportunity.

In the long run, the rush of these institutions could lead to even more exciting developments. Considering that most stablecoins currently circulating in the market are pegged to the depreciating U.S. dollar, the need for stablecoins pegged to real-world assets such as gold will grow.

This is why many executives of mainstream financial institutions openly criticize DeFi but continue to invest behind the scenes. They are well aware of the future potential of this field.

Gold Rush Shows DeFi’s Maturity

The current situation is the first sign of what role gold can play in the on-chain environment as an asset haven in times of crisis. When the market is volatile, investors are entering gold instead of exiting stablecoins or cash positions within DeFi, which means that the DeFi ecosystem is becoming truly financially diversified.

This is a very healthy sign. If DeFi’s liquidity problem was its biggest weakness in the past, the current rush to gold indicates that this problem is being resolved. As investors stay in DeFi in the midst of extreme volatility, mechanisms are emerging to protect their assets at the same time.

That tokenized forms of gold can truly thrive on-chain, and that this can play a more active role in the financial system. The current rush for gold is the clearest evidence of this evolution and a sign that the DeFi market is moving to the next level.