Traders who wish to avoid market volatility and stagflation are increasingly using gold-backed crypto currencies.
This week, the aggregate value of PAX Gold and Tether Gold, two popular gold-backed cryptocurrencies, reached $1 billion. CoinDesk said this because it cited a report from Arcane Research, which tracks cryptocurrencies. This is a 60% rise from the same time last year. It was a good day for both cryptocurrencies to hit new highs on Tuesday. After stocks started to rise again, they both fell back down again.
When PAX Gold hit $2,071 on Tuesday, it was the highest price it has been in the last three months. Tether Gold went up to $2,076, which was its highest point in a year. This meant that it was worth more than it had been before.
When the S&P 500 and Dow Jones rose on Wednesday, it was a good day for stocks like those. The price of gold-backed crypto tokens went down. PAX fell 2% to $1,993, and Tether Gold fell about 3% to $1,993. Both prices were in line with the price of real gold.
During the first week of January, both tokens have gone up more than 8%.
Gold is a Crypto Digital Token
PAX Gold and Tether Gold, like Ether and Bitcoin, are digital currencies backed by gold. This is similar to other well-known crypto coins. These two coins are worth 1 troy oz of gold each. Because the tokens are connected to physical goods, they are less volatile than other cryptocurrencies.
If you want to invest, it’s said that you can buy gold-backed cryptocurrencies to do so as a public service. These tracks the price of gold without having to buy real gold bars from a dealer. When you buy gold-backed tokens, you’re buying an ETF that mirrors the price of gold. But with gold-backed tokens, you can get real gold instead of just cash, like with ETFs.
CoinMarketCap users claim that when Russia invaded Ukraine on February 24th, both PAX and Tether prices rose. PAX rose 7% to $2,043 in the first 12 hours of the war, while Tether rose 3% to $1,978.
Russia’s invasion of Ukraine has caused a lot of problems in the economy, which has led to a rise in the prices of things like oil. Some traders have started to buy more gold. In this case, they might want to invest in other things like silver to protect their money if stock prices fall. Some people say that the United States is going to have a lot of money. While some inflation rises, economic growth isn’t moving forward.
It was like this: This is what stagflation was like in the 1970s.
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