Spot Commodities

Definition ∞ Spot commodities are physical goods or raw materials that are traded on exchanges for immediate delivery and payment. Examples include oil, gold, agricultural products, and industrial metals. The price of spot commodities reflects their current market value based on immediate supply and demand conditions. Transactions involving spot commodities are settled relatively quickly, typically within a few business days.
Context ∞ Discussions regarding spot commodities in the context of digital assets often relate to their use as inflation hedges or as collateral for stablecoins and other financial instruments. News reports frequently analyze the correlation between the price movements of traditional commodities like gold and Bitcoin, exploring whether digital assets can fulfill a similar store-of-value function. A key debate involves the potential for tokenizing physical commodities on blockchains to improve liquidity and accessibility. Future developments are anticipated to include greater integration of tokenized commodities with DeFi protocols and the establishment of more robust frameworks for their valuation and trading.