🟡 PAXG and XAUT: Are They 'Digital Gold' or Just Paper Riches?
Gold prices are hitting new highs, while traditional investors are still looking for safes to store their gold bars, crypto investors have already locked in PAXG and XAUT. Let's take a look at when tokenized gold is superior to physical gold, and what risks we need to take on.
Why is tokenized gold more appealing?
✅ Excellent liquidity: 24/7 real-time trading. Imagine how much of a discount you'd get selling gold bars to a bank and how long it would take?
✅ Low entry barrier: No need to buy a whole ounce; you can hold gold with just $10.
✅ Zero holding costs: No need to pay for bank safe deposit rental or insurance fees.
But every coin has two sides, and the following risks cannot be ignored:
Non-physical holding: What you hold is a digital contract rather than the physical asset. While it can be redeemed for physical gold bars (LBMA standard), the threshold is extremely high—typically around 430 PAXG/XAUT. For retail investors, this is merely a theoretical option. Issuer risk: The safety of your assets depends on the credit of Paxos or Tether. If the issuer encounters problems, the token price could decouple from the gold price. Regulatory pressure: Tokens anchored to precious metals have always been a focal point of regulatory scrutiny. Changes in laws and regulations could affect their liquidity. Price decoupling risk: During extreme volatility or panic in the crypto market, due to liquidity issues, the token price may temporarily deviate from the spot gold price.
Summary: Tokenized gold is an excellent tool for short-term speculation and rapid hedging against risks. But if your goal is long-term risk avoidance and 'doomsday preparation', physical gold bars remain irreplaceable.
Would you choose easily accessible gold bars, or the convenient and flexible token? Share your thoughts in the comments! 👇
