Tokenized Silver Is Far Behind Tokenized Gold. Here Is Why, and Why It Matters

On-chain gold is a multi-billion-dollar market. On-chain silver is a rounding error next to it. The gap is not an accident, and it is not permanent.

By Hedgents Research

TL;DR. On-chain silver is a rounding error: roughly $250M in June 2026 against $5.1B of tokenized gold, about one twentieth the size, and a single token (Kinesis Silver) is almost all of it. That gap is a build-and-buy failure, not a silver problem. Gold tokenizes cleanly, vaults cheaply, and sells itself as "digital gold." Silver is half-industrial, costs more to store, and has a messier story to underwrite. The metal itself is fine. The gold/silver ratio sits near 63, below its long-run average, and silver is running its sixth straight supply deficit. A portfolio that is 100% tokenized gold and calls itself a metals allocation is a plumbing accident. Silver belongs in a real multi-metal basket today.

The size gap, in numbers

The scoreboard is lopsided.

Tokenized gold is a real market. The CoinGecko tokenized-gold category sits near $5.1B in mid-June 2026, and tokenized-gold spot trading hit $90.7B in Q1 2026 alone, already past the full-year 2025 total. Two issuers run it: Tether Gold (XAUT, near $2.7B) and Paxos Gold (PAXG, near $2.2B), together more than 90% of the category.

Silver is not in the same weight class. The CoinGecko tokenized-silver category is around $250M as of June 2026. One token, Kinesis Silver (KAG), is roughly $248M of that, backed one-to-one by allocated bullion in audited vaults. Everything else is small. Matrixdock Silver (XAGm), the LBMA Good Delivery silver token that launched in March 2026, is only a few million in market cap so far. The rest (tokenized iShares Silver via Ondo, Remora's SLVr ETF wrapper, a few regional tokens) is smaller still.

So the on-chain ratio runs roughly 20 to 1 in gold's favor. The physical market looks nothing like that. Gold is worth more per ounce, but the world holds far more silver tonnage above ground, and physical silver investment demand is large and growing. The on-chain gap is not a reflection of the physical market. It is a reflection of who has bothered to build, and who has bothered to buy.

And the builders are not the problem. Kinesis, Matrixdock, Ondo, and the rest are the supply rail: the regulated, custodied, attested inventory any index or hedged product has to source from. A thin rail is something to describe, not a competitor to beat.

Why gold ran ahead

Four things pushed gold to the front of the queue.

Gold is the monetary metal. Silver is half-industrial. Gold's entire investment thesis fits in one sentence: it is what capital runs to when it distrusts everything else. A tokenized gold product inherits that pitch intact. Silver's story is split. Industrial and technology fabrication (solar PV, electronics, automotive, a growing data-center and AI component) was roughly 60% of total silver demand in 2025, per the Silver Institute's World Silver Survey 2026. Part monetary hedge, part cyclical industrial input. That is a harder thing to sell to a treasury that just wants "digital gold," and it trades with more volatility, which makes the token harder to position.

The default crypto-to-metal trade is gold. When a DAO treasury or a crypto-native fund decides to add real-metal exposure, the first instinct, often the only instinct, is gold. It is the familiar door. Silver is the second thought, and second thoughts get smaller allocations and fewer dedicated products. So issuers build where the demand already sits, which deepens gold's lead, which starves silver of the liquidity that would pull in more issuers, which keeps the products from being built. It is a self-reinforcing loop, and it is the real reason the gap is twenty to one rather than three to one. None of the four reasons compounds the way this one does. Break the loop anywhere and the others stop mattering much.

Silver is bulky. A dollar of silver eats far more vault space than a dollar of gold: roughly two ounces of gold against more than a thousand ounces of silver for the same six-figure sum. That hits storage fees directly. Allocated silver vaulting commonly runs around 0.30% a year against roughly 0.12% for gold, 2.5x on a percentage basis. A tokenized product passes custody cost through to the holder, often as a slowly declining ounces-per-token figure, so silver is simply more expensive to hold on-chain. Thinner margins, thinner reason to launch.

Standalone silver-token demand is thin. Even where the tokens exist, almost nobody is buying a pure single-metal silver position on-chain. Kinesis aside, most silver tokens trade tiny volumes. A buyer who wants silver has historically reached for an ETF (SLV and its peers) or physical bullion, not an SPL or ERC-20. Without a clear on-chain use (collateral, composability, a basket to slot into), the standalone silver token never found its buyer. Supply showed up faster than demand.

The gold/silver ratio, and why silver is not a sideshow

The reasons silver trails on-chain are about plumbing. They say nothing about silver as an asset.

The gold/silver ratio, how many ounces of silver buy one ounce of gold, sat near 63 in late June 2026 (roughly $4,200 gold against $66 silver on June 22). That is below the 50-year average of about 65 to 70. It has been volatile this cycle: into the 80s during the spring correction, down to the low 50s in late January when silver hit its all-time high. A ratio drifting below the long-run average has historically marked silver's outperformance windows, the stretches where it does the catching up.

The supply side leans the same way. Silver is on track for its sixth consecutive annual market deficit in 2026, per the Silver Institute, with above-ground stocks drawn down materially since 2021. Slower solar offtake takes a little off industrial demand, but data-center, AI, and automotive uses are picking it back up, and investment demand is forecast to stay strong.

I am not going to hand you a price target. But a ratio below its long-run average, a metal at an all-time high in January, and a sixth straight deficit is a setup, and pretending otherwise is its own kind of dishonesty.

Allocators keep getting one thing wrong. A portfolio that is 100% tokenized gold is not "diversified into metals." It is concentrated in one metal that happens to be the easiest one to tokenize. That is a plumbing decision masquerading as an allocation decision. Anyone holding PAXG and calling it a metals book is not wrong about gold. They are just letting the supply rail pick their portfolio.

What a real multi-metal basket needs from silver

Build actual metals exposure and silver is a core leg, not a future feature. A basket across gold, silver, platinum, and palladium captures different drivers: gold's monetary-hedge behavior, silver's hybrid profile, and the platinum-group metals' tighter industrial and automotive links. They do not move in lockstep. That is the whole reason to hold more than one. The ratio swinging from the low 50s to the 80s inside six months is not noise to a basket. It is a rebalancing opportunity a single-metal long cannot touch.

The catch is the rail. On-chain silver is thin and concentrated, one token holding nearly all of the market cap. A passive buyer who just wants to "add silver on-chain" inherits that concentration whole: one issuer's custody, one issuer's redemption terms, one token's liquidity depth setting their exit. That is exactly the single-issuer risk a metals allocation is supposed to spread, reintroduced through the back door.

So this is an argument for active management over passive aggregation. A managed basket can source silver from whatever rail is deepest and most substitutable at the time, weight it deliberately against the other three, and rebalance into the ratio swings instead of riding them blind. Thin silver is not a reason to skip silver. It is a reason to manage the exposure rather than buy one token and hope.

What we are building

That is why we are building hgMETAL: an oracle-free, in-kind, actively-managed index across four metals (gold, silver, platinum, palladium; no copper, no yield overlay on the index itself). Silver is a core leg, risk-weighted and rebalanced against the others, not a teaser for a later version. Alongside it sits a separate hedged-carry structure for the holder who wants metals exposure without the directional bet: the basket hedged toward delta-neutral, with the return designed to come from metals-perp funding rather than the metal's direction. We are not putting hard yield numbers on that here, by design. It is early. Today hgMETAL is live on Solana devnet with a paper (simulated) hedge and no live-capital track record yet.

Look at it here: terminal.hedgents.com.

Methodology and sources

Tokenized-market figures are from CoinGecko's tokenized-gold and tokenized-silver category pages (June 2026) and CoinGecko's Q1 2026 tokenized-gold volume reporting. Silver supply, demand, and deficit figures are from the Silver Institute / Metals Focus World Silver Survey 2026. The gold/silver ratio and spot prices are from gold/silver market data as of late June 2026. Vaulting-cost comparisons are from public bullion-storage fee schedules. Matrixdock XAGm and Kinesis KAG details are from their own public materials and exchange listings. Tokenized-metal markets move quickly, so verify before acting.

Sources:

This analysis is informational only and does not constitute investment advice.