PAXG Soars: Gold-Backed Token Hits Record Volumes, Trading at Premium to Spot Gold
Digital gold just got real—and investors are paying extra for the privilege.
Record-Breaking Demand
PAXG volumes hit unprecedented levels as traders flock to gold exposure without the storage headaches. The token now trades above physical gold prices—because apparently digital delivery commands a premium in today's market.
Safe Haven Frenzy
With traditional markets wobbling, crypto investors are rediscovering gold's timeless appeal. Just don't mention that you're paying more for the digital version than the actual metal—that would require acknowledging Wall Street's alchemy skills.
Gold's digital transformation bypasses vaults and armored trucks, cutting straight to what matters: speculative positioning dressed up as prudent hedging. Because nothing says 'safe investment' like paying extra for synthetic exposure to an ancient store of value.
Gold-backed tokens become the day’s leaders
Other gold-backed tokens ruled the roost on Friday, as crypto assets stalled in their growth. This follows a recent series of records, with Gold surging above $4,300 for the first time in history.
In total, gold-backed tokens lock in $3.39B, a relatively small part of the tokenization market and crypto assets as a whole. The main appeal of the tokens are the claims that each one of them is actually backed by gold in a vault.
Not all gold-based tokens guarantee real reserves, or a claim to physical gold. In the short term, those assets are offsetting the weakness of altcoins and BTC, and are one of the major venues for hype-based trading.
Tether’s XAUT claims higher reliability
As of October 17, the ongoing strength of PAXG is putting the token in the second spot based on market capitalization. Tether’s XAUt is still the most widespread gold-backed token, with claims to higher security and backing by physical gold in a vault.
XAUT traded at a lower premium, around $4,373.04, still far from losing its top valuation and being displaced by PAXG. The token’s absolute peak was reached at $5,106, and the most probable reason was the drive to liquidate all short positions for the token on its derivative market.
The more active token is also seen as risky, as its premium price has also been followed by deeper corrections. The recent PAXG premium has been previously wiped out by flash-crashes. Additionally, the PAXG rally on Binance was also caused by liquidations, as some tried to short the token. The current PAXG price action is not as connected to the movements of gold.
PAXG also drew attention after the stablecoin issuer Paxos minted 300T PYUSD by mistake.
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