A new category of crypto has been gaining popularity in recent months. These are the new variant of stablecoins Gold Coins. Gold coins are guaranteed with gold and are pegged to the dollar to reduce volatility. The largest of these, Pax Gold or PAXG, has gained 7.4 percent this year and its rival Tether Gold has gained nearly 8 percent. In comparison, bitcoin is down more than 13 percent and ether is down nearly 20 percent.
Everett Millman, Chief Market Analyst at Gainesville Coins, said, “One of the biggest fears many people have is that crypto With nothing guaranteed. This only happens on one screen. For this reason it is better to link them to a real commodity.” Gold is considered a hedge against inflation. However, the concept of gold-guaranteed cryptocurrencies is new. Stablecoin, a rapidly growing version of crypto, has emerged as a major medium of exchange. It is often used to send funds on behalf of traders. It is easy to exchange major stablecoins for bitcoin or other cryptocurrencies.
Tether Gold is preferred by big investors. These include whales holding cryptocurrencies worth $1 million or more. These investors make it a means to convert a part of their holdings into gold. “Many of our investors are already into crypto, but they don’t want to keep their entire holdings in crypto or dollars. As a result, they prefer assets like gold,” said Paolo Ardoino, Tether’s chief technology officer. However, the concept of gold-guaranteed coins is new.
PAXG and Tether Gold have been launched for a little over two years and have low liquidity. The value of PAXG has reached around $627 million this year and a little over $209 million for Tether Gold. In comparison, the largest dollar-linked Tether stablecoin has a market capitalization of over $83 billion. CoinMarketCap’s data According to PAXG, the trading volume per day in the last one month ranged from $10 million to $52 million. In comparison, ether’s volume is between $8.7 billion and about $25 billion.