A new vulnerability crypto market is showing a vast market paralyzed by war and inflation.
Gold-backed coins are new variants of stablecoins commonly associated with the dollar to curb volatility. The largest, Pax Gold, or PAXG, jumped 7.4 percent in 2022, while its main rival, Thezer Gold, jumped 8 percent.
In contrast, Bitcoin lost more than 13 percent and Ether lost 20 percent.
“One of the major concerns of many newcomers to crypto is that it is not supported by anything.”
Efforts to find gold, a cultural barrier to geopolitical turmoil and inflation, are not surprising. But the demand for gold-backed cryptocurrencies is new.
Stablecoins, a fast-growing crypto currency, have emerged as a common trading method often used by merchants seeking to transfer money. It is easier to exchange major currencies with bitcoin or other cryptocurrencies, for example, than to convert traditional currencies into dollars.
Tether Gold was bought by big investors, with “whales” with $ 1 million or more in cryptocurrency using the symbol to turn a portion of their gold into gold, according to Tate Technology Officer Paolo Ardoino.
“Most of us investors are involved in crypto but they want to keep all their assets in crypts or dollars and look for value-added assets like gold,” he said.
However, gold-backed coins are relatively new in the crypto market – PAXG and Tether Gold are less than two years old – with little liquidity and little confidence in their long-term value.
PAXG doubled its market value this year to $ 627 million, while Teter Gold rose 9 percent to $ 209 million. By comparison, the last eight-year-old sister has a market cap of over $ 83 billion on Dollar Page Tether – the world’s largest stable coin.
According to CoinMarketCap, daily PAX gold traded between $ 10 million and $ 520 million last month, with ether prices fluctuating between $ 8.7 billion and $ 25 billion in April. The 24-hour dollar page is worth $ 35 billion to $ 92 billion.
Does all that flash?
Skeptics argue that PAXG, the company Paxos and Teter Gold, only raised their tails for gold. In fact, they tracked 8.5 percent of physical gold prices this year. PAXG Russia increased by 4.5 percent the day before the invasion of Ukraine on February 23.
The SPDR Gold Shares exchange, funded by Stet Street Global Advisors, is up 7.6 percent by 2022.
Alex Thorne, head of galaxy digital research at New York, said: “Crypto gold tokens themselves are immutable.
He said investors should decide to have the same level of confidence in the companies behind PAXG and Gold ETF.
“Both are essentially gold-plated artificial gold exposure.
However, proponents of such coins claim that they can easily obtain gold without having to worry about storing a physical coin or bar, eliminating the often small profit margins required to trade gold in traditional markets.
PAXG, for example, requires a minimum investment of at least 0.01 ounces of gold, approximately $ 20, for an investor paying $ 184 per share for each SPDR Gold ETF.
Milman argues that Guinnessville coins, as well as stable gold coins, strengthen the credibility of cryptocurrencies.
“One of the main criticisms of Cryptus is that it is extremely volatile. So the idea of supporting a stable commodity exchange.” Marriage between the two can strengthen faith in cryptos. “