A Capital Allocator’s Guide to Tokenized Gold vs. Bitcoin

Disclosure: This is for informational purposes only and not investment advice. Crypto and DeFi strategies involve significant risk, including smart-contract failure, depeg risk, operational/custody failures, and third-party or protocol insolvency.

TL;DR

• Tokenized gold is a digital receipt for physical gold stored in a vault, while Bitcoin is like digital cash where possession of keys is ownership
• The practical differences come down to what you're trusting, how you verify backing, and how custody works
• Both can generate yield through institutional-grade vaults, but the risk profiles differ significantly
• YO offers yield-bearing vaults for both: yoGOLD (XAUt-based) and yoBTC, with transparent onchain strategies and audited smart contracts
• Many sophisticated allocators hold both assets as 2025’s divergence (Gold +67% vs. BTC -6%) highlights the diversification benefits from holding both

Evolution of the Bitcoin vs. Gold Debate

Gold and Bitcoin are often discussed as competing “store of value” assets, and the debate has historically been ideological, portrayed by traditionalists like Peter Schiff and crypto-natives like CZ. One side emphasizes centuries of monetary history, tangible reserves, and “intrinsic value.” The other emphasizes digital scarcity, global portability, and censorship-resistance. For years, the debate centered on which asset is “better,” but tokenization is now bringing gold onto a more level playing field by improving its mobility and settlement in digital markets.

A broader trend is accelerating this shift. Traditional assets, or real-world assets (RWAs), such as T-bills, equities, and commodities, are increasingly being tokenized and brought onchain, which is expanding what can be held and used inside crypto markets. Crypto is no longer only about holding tokens and hoping for price appreciation. There is now a large DeFi industry with over $130 billion in total value locked (TVL) that supports traditional financial activity like borrowing, lending, and market making. In these markets, assets that are easier to price, more liquid, and simpler to risk-manage tend to integrate more widely into lending and trading systems.

Tokenized gold is a direct result of this shift. It does not change what gold is, but it changes how gold exposure can be held and transferred. Instead of living only inside traditional financial accounts and settlement systems, tokenized gold can be held onchain, moved quickly, and used in strategies that can make gold productive. This demand is visible onchain, where tokenized gold market capitalization has increased roughly 150% to roughly $4.2 billion over the last six months.

Two "Digital Gold" Narratives, Two Very Different Trust Models

To choose the right asset, you must look past the price action and understand the structural difference. The decision between the two typically comes down to what you want to trust, how you verify it, and how you custody it.

1. Tokenized gold = Digital Receipt

When you hold Tokenized gold (like XAUt), you hold a legal claim on a specific amount of physical gold stored in a vault (e.g., in Switzerland).

1. Bitcoin = Digital Cash

Bitcoin is like digital physical cash, where possession of the private keys is ownership.

How YO Generates Yield on Gold and Bitcoin

For most capital allocators, the question isn’t whether to seek yield—it’s what risks you’re being paid to take and whether those risks are defined and sized appropriately. In today’s DeFi, you no longer have to choose between "safety" and "yield." You can hold the hard asset and compound your stack simultaneously.

yoGOLD is built on Tether gold (XAUt), where each token represents one troy ounce of physical gold held in Swiss vaults. Tokenized gold is still relatively new, with limited options for earning yield through vanilla DeFi strategies like lending or market making. YO’s yield strategy employs a collateralized carry structure that seeks to earn a net spread while keeping the core position in gold:

1. Collateralize: The underlying XAUt is deposited into Aave as collateral to borrow stablecoins (USDC, USDT) at conservative loan-to-value (LTV) ratios.
2. Borrow: The borrowed stablecoins are then deployed into battle-tested DeFi protocols to capture the spread between borrow costs and yield.
3. Harvest and compound: Strategy profits are compounded back into XAUt periodically to increase gold exposure over time.

Key risks: liquidation/oracle risk, stablecoin depeg risk, and protocol/smart contract risk.

yoBTC accepts Coinbase BTC (cbBTC) as the underlying asset because Bitcoin’s native network is designed primarily for secure transfers, not for programmable DeFi applications. Most yield strategies require smart contracts to handle deposits, collateral management, interest accounting, and liquidations. yoBTC solves this by utilizing cbBTC, which wraps BTC with Coinbase’s institutional-grade custody, allowing it to be deployed into DeFi. Bitcoin yield strategies are relatively more developed given its maturity and deeper onchain liquidity. The primary DeFi strategies for earning yield on BTC include:

• Overcollateralized lending: BTC is lent to overcollateralized borrowers on blue-chip lending markets (like Aave and Morpho). Yield is generated by interest paid by overcollateralized borrowers who engage in leverage or hedging.
• Market making: Provide liquidity to decentralized exchanges (DEXs) to support swaps between various BTC derivatives (e.g., swaps between cbBTC and WBTC), earning trading fees and protocol incentives.

Key risks: protocol/smart contract risk, depeg risk, and liquidation/oracle risk.

Decision Guide: Which Exposure Is Right for You?

So which is “right” for you?

Tokenized gold tends to fit investors who prioritize:

• Commodity-linked exposure with a more familiar risk profile
• Clear reserve, custody, and redemption terms within acceptable jurisdictions
• Improved portability and settlement while keeping gold as the underlying anchor

Bitcoin tends to fit investors who prioritize:

• A sovereign digital asset with a fixed, deterministic issuance schedule
• Global, permissionless transfer and settlement
• Asymmetric upside potential, with comfort managing higher volatility and operational custody requirements

Sophisticated allocators increasingly evaluate gold and Bitcoin side by side as diversifying exposures, and adoption data suggests both are becoming more mainstream in portfolios. Sygnum’s 2025 APAC HNWI survey reports that 87% of respondents already hold digital assets, with median allocations in the 10-20% range and a weighted average around 17%. In the U.S., one frequently-cited estimate by River suggests more Americans hold Bitcoin (~50M) than gold (~37M), which highlights how large the category has become.

Recent market cycles have also shown why allocators increasingly treat Bitcoin and gold as complementary rather than substitutes.

• 2024: Bitcoin dominated (+121%) while gold was steady (+25%).
• 2025: The regime inverted. Gold acted as the ultimate hedge (+67%), while Bitcoin saw a moderate correction (-6%).

As of January 2026, the 1-year correlation between Bitcoin and XAUt is approximately 0.05, while the 30-day rolling correlation is slightly higher at 0.17. A correlation near zero (between -0.1 and 0.1) suggests a negligible relationship, making them complementary assets in a diversified portfolio.

Allocators who only held one side of the barbell missed either the defensive value of gold or the asymmetric upside of Bitcoin.

Conclusion

The era of non-productive assets is over. Whether you trust the custodian or the ledger, your capital should be working for you.

YoGOLD and yoBTC are designed to reflect that reality. Both vaults start from a simple premise: hold the underlying asset you believe in, then apply conservative, transparent strategies to make that exposure productive.

What matters most is that the risks are explicit, onchain, and continuously managed. Allocators can see where capital is deployed and what risks they are being paid to take, in real time.

Explore the vaults and start earning today at app.yo.xyz.