Digital gold surges, but still trails physical demand
Digital gold is growing fast, but do most buyers still prefer physical metal? Trust, clear redemption and regulation are key to broader adoption.
Fast growth, small base
The World Gold Council (WGC) reports the total physical investment gold market is valued at about $13 trillion globally. Digital gold, which includes vaulted digital gold and tokenized gold, remains a small segment – less than 1% of the total market. As of early 2026, this emerging digital gold category is measured between $45 billion and $55 billion. The WGC estimates tokenized gold saw $90 billion in total spot trading volume in the first quarter of 2026, already outpacing all of 2025.
Despite rapid growth, digital gold is far from mainstream. Survey data cited by the WGC shows almost 90% of retail investors would consider digital gold under the right conditions. If barriers are addressed, as much as $700 billion in latent demand could enter the market. Even so, that potential is modeled over the long term, and actual allocation depends on resolving key issues for investors.
Trust and redemption matter
For most buyers, confidence in the provider is the crucial factor in trying digital gold. Four out of five investors surveyed said trust is their top priority, with many citing the need for clear evidence that the digital product is safe, legitimate and backed by real gold. The WGC finds that ability to redeem digital exposure for physical metal increases appeal.
Regulations and consumer protections are also seen as major hurdles. Buyers often want rules to ensure their digital gold is both secure and truly linked to physical metal in a vault. These requirements leave much of the onus on product providers to deliver transparent reporting and straightforward redemption processes.
Buyer impact: digital gold or physical metal?
According to WGC data, digital gold is drawing new participants who have not previously bought gold in any form. Around 65% of potential demand comes from first-time gold buyers. For those already holding physical metal or exchange-traded funds (ETFs), more than half would purchase digital gold with money not currently allocated to gold. This suggests that digital products are not replacing physical bars or coins on a significant scale, but are attracting a different segment of demand.
Competitiveness on price is another sticking point. Digital gold must offer cost structures comparable to physical gold and ETFs, though price is rarely the only factor in buyer decisions. Product innovation, such as the ability to earn yield or use digital gold as loan collateral, could tip the balance for some users.
What may influence adoption next
Broader use of digital gold may hinge on its integration into familiar financial channels and apps, especially in markets like India, China and Indonesia where uptake is already higher. Younger buyers surveyed showed more awareness and openness than older cohorts, but adoption still depends on clear, secure pathways from digital claims to redeemable, audited physical metal.
We think the more useful distinction now is not simply digital versus physical gold, but what can be verified at each step. For most investors, the key question is whether digital gold can really be redeemed for specific, allocated metal, with transparent audits and reporting. Until those checks are widely published, the spot price or digital innovation alone will not drive mass substitution for physical metal.
Source: Digital Gold: Unlocking a $700-Billion Opportunity
This article is general information, not investment advice. Facts from other publications are their reporting, linked above.