Gold-Backed Token PAXG Surges to $2.9K Amid Rising Geopolitical Tensions
Over the weekend, the price of PAX Gold (PAXG), a digital asset backed by gold and created by Paxos, experienced a significant increase as geopolitical tensions in the Middle East escalated, leading to a surge in demand for safe-haven assets.
PAXG reached a high of $2,923 on Saturday, trading at a premium of more than 20% compared to the price of gold, which was at $2,342.90 per ounce at the close of trading on Friday in New York, according to data from CoinDesk. Currently, PAXG is still trading at a premium, with a price of $2,471.
Meanwhile, the prices of bitcoin and other major cryptocurrencies were under pressure following Iran's attack on Israel in response to an alleged Israeli assault on its consulate in Syria on April 1. Iran issued a warning to Israel and the United States about a potential larger retaliation, which further heightened tensions.
With a market capitalization exceeding $446 million, PAXG is the second-largest tokenized gold coin in the world. Tether gold (XAUT) holds the top spot with a market capitalization of $581.9 million. Despite the surge in PAXG over the weekend, XAUT and other gold-backed tokens did not experience similar gains. CoinDesk reached out to Paxos for a statement but had not received a response at the time of publication.
Gold has seen an increase of more than 8% over the past four weeks, while bitcoin has declined by 10%. Analysts at Goldman Sachs raised their year-end price target for gold to $2,700 from $2,300, citing continued momentum and the interest of retail investors in the precious metal.
Many traditional market participants closely monitored the spike in PAXG and the decline in BTC over the weekend, speculating whether the risk-off sentiment in the 24/7 crypto market could foreshadow a similar trend in stocks on Monday.
"Now, even those who are not involved in crypto are turning to BTC to assess the market's reaction to geopolitical events because it is the only market open during times of conflict," remarked Andy Constan, founder of macroeconomic research firm Damped Spring, on X.
Bob Elliot, a former Bridgewater Executive and the Chief Investment Officer of Unlimited Funds, noted the perfect negative correlation between BTC and PAXG over the weekend, suggesting that BTC's role as a geopolitical hedge had been undermined.
"While bitcoin serves many purposes, it does not serve as an effective geopolitical hedge. This weekend provided another clear demonstration. BTC demonstrated a near-perfect negative correlation with PAXG, a gold-backed token, indicating that it is becoming an increasingly ineffective hedge over time," Elliot stated on X.
PAXG reached a high of $2,923 on Saturday, trading at a premium of more than 20% compared to the price of gold, which was at $2,342.90 per ounce at the close of trading on Friday in New York, according to data from CoinDesk. Currently, PAXG is still trading at a premium, with a price of $2,471.
Meanwhile, the prices of bitcoin and other major cryptocurrencies were under pressure following Iran's attack on Israel in response to an alleged Israeli assault on its consulate in Syria on April 1. Iran issued a warning to Israel and the United States about a potential larger retaliation, which further heightened tensions.
With a market capitalization exceeding $446 million, PAXG is the second-largest tokenized gold coin in the world. Tether gold (XAUT) holds the top spot with a market capitalization of $581.9 million. Despite the surge in PAXG over the weekend, XAUT and other gold-backed tokens did not experience similar gains. CoinDesk reached out to Paxos for a statement but had not received a response at the time of publication.
Gold has seen an increase of more than 8% over the past four weeks, while bitcoin has declined by 10%. Analysts at Goldman Sachs raised their year-end price target for gold to $2,700 from $2,300, citing continued momentum and the interest of retail investors in the precious metal.
Many traditional market participants closely monitored the spike in PAXG and the decline in BTC over the weekend, speculating whether the risk-off sentiment in the 24/7 crypto market could foreshadow a similar trend in stocks on Monday.
"Now, even those who are not involved in crypto are turning to BTC to assess the market's reaction to geopolitical events because it is the only market open during times of conflict," remarked Andy Constan, founder of macroeconomic research firm Damped Spring, on X.
Bob Elliot, a former Bridgewater Executive and the Chief Investment Officer of Unlimited Funds, noted the perfect negative correlation between BTC and PAXG over the weekend, suggesting that BTC's role as a geopolitical hedge had been undermined.
"While bitcoin serves many purposes, it does not serve as an effective geopolitical hedge. This weekend provided another clear demonstration. BTC demonstrated a near-perfect negative correlation with PAXG, a gold-backed token, indicating that it is becoming an increasingly ineffective hedge over time," Elliot stated on X.
Last edited at：2024/12/16
#BTC