Why tokenized commodities matter today

Written by Philipp Pieper, Co-Founder of Swarm, a compliant RWA platform

Historically, commodity markets have shown high volatility during periods of geopolitical conflict. This phenomenon arises from the supply shocks that such events generate, impacting the production of and demand for commodities. Recently, global attention has been drawn to conflicts involving Russia and Ukraine, and tensions that have escalated between Israel and Hamas in the Middle East. Fluctuations in the price of copper exemplify the impact of these conflicts on commodity markets. Volatility from these conflicts means copper is nearing its historical all-time high of $10,845 per tonne, with some reports suggesting it could go as high as $15,000.

During periods of geopolitical tension, gold serves as a safe-haven asset for investors seeking to protect their portfolios. This sentiment is mirrored in the price of gold, which surged from around $1,800 in October 2023 to nearly $2,400 by May 2024, reflecting a heightened demand during conflict escalations. Commodities are among the most…