Gold-Backed PAXG Token Spikes to $2.9K Amid Geopolitical Tensions

Bitcoin traded at a perfect negative correlation to PAXG in a sign of weak demand as a geopolitical hedge, according to one observer.

AccessTimeIconApr 14, 2024 at 5:46 p.m. UTC
Updated Apr 15, 2024 at 4:18 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now
  • PAXG spiked as high as $2,923 on Saturday, trading at premium of over 20% to gold's per ounce price of $2,342.90 on Friday.
  • Bitcoin traded at a perfect negative correlation to PAXG in a sign of weak demand as a geopolitical hedge.

Prices for PAX Gold (PAXG), a gold-backed digital asset created by Paxos, surged over the weekend as escalating geopolitical tensions in the Middle East catalyzed demand for haven assets.

PAXG rose as high as $2,923 on Saturday, trading at a premium of over 20% to the yellow metal's per-ounce price of $2,342.90 at Friday's New York close, CoinDesk data show. As of writing, PAXG still drew a notable premium, trading at $2,471.

Meanwhile, bitcoin and other major cryptocurrencies traded under pressure as Iran fired explosives at Israel in retaliation for a suspected Israeli attack on its consulate in Syria on April 1. On Sunday, Iran warned Israel and the United States of a much larger response after Tel Aviv said it would respond to Iran's retaliatory aggression.

With a market capitalization of over $446 million, PAXG is the world's second-largest tokenized gold coin. Leading the pack is tether gold (XAUT) with a market capitalization of $581.9 million. PAXG's weekend surge did not spill over into XAUT and other gold tokens.

"Geopolitical events create price movements; it is not simple or straightforward to know what the price of gold should be at any given moment," Paxos' spokesperson told CoinDesk in an email.

"In addition, the main spot gold markets are only open from Sunday at 6pm until Friday early afternoon. When events occur globally over the weekend, the price of gold could not be referenced against the main spot market because it is closed. Gold has been very volatile recently and even on Friday, gold traded in a $100 range, which is virtually unprecedented," spokesperson added.

Gold has surged over 8% in four weeks, while bitcoin has declined by 10%. On Friday, analysts at Goldman Sachs raised its year-end price forecast for gold to $2,700 from $2,300, saying that momentum and retail investors haven't yet piled into the yellow metal.

Leading indicator

Several traditional market participants closely followed PAG's spike and BTC's slide over the weekend, wondering if the classic risk-off action in the 24/7 crypto market was a sign of things to come in stocks on Monday.

"And so now everyone who isn't involved in crypto is watching BTC to gauge the market impact of war cuz it's the only thing that's open when drones fly," Andy Constan, founder of macroeconomic research firm Damped Spring, said on X.

Former Bridgewater Executive and CIO of Unlimited Funds Bob Elliot said BTC's perfect negative correlation with PAXG over the weekend dented the leading digital asset's appeal as a geopolitical hedge.

"Bitcoin may be many things, but it is not a geopolitical hedge. This weekend was another good empirical test. BTC traded with a near-perfect negative correlation over the last day to PAXG, a gold-backed token. If anything it's becoming an even worse hedge over time," Elliot said on X.

April 15, 4:17 UTC: Adds comments from Paxos.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.