Bitcoin News Today: As Crypto Crumbles, Gold Tokens Rise-But Can It Last?

Gold-Backed Tokens Hold Firm in $19B Crypto Rout, But Rally May Be Near Exhaustion

Gold-backed tokens have maintained their value amid a broader crypto market downturn, with PAX Gold (PAXG) and Tether Gold (XAUT) demonstrating resilience as safe-haven assets. Despite a $19 billion contraction in crypto market capitalization in late 2024, tokenized gold saw inflows, driven by geopolitical tensions and macroeconomic uncertainty . By April 2025, PAXG had reached all-time highs, reflecting gold's 23% year-to-date gain, while XAUT's recent $437 million supply expansion pushed it past PAXG in market cap .

The tokens' performance contrasts sharply with Bitcoin's 65% decline in 2022 and its 11% drop in Q1 2025, underscoring their inverse relationship with crypto volatility . PAXG's volatility remains 10-15% annualized, significantly lower than Bitcoin's 60-100% range . During the April 2025 tariff-driven equity market rout, gold-backed tokens surged as stocks plummeted, reinforcing their role as hedges . Similarly, XAUT's market share grew amid heightened demand for liquidity, with its holder base expanding 173% year-to-date compared to PAXG's 29% .

Geopolitical catalysts, including U.S.-China trade tensions and Middle East conflicts, have amplified gold's appeal. In August 2025, Trump's 100% tariff announcement on Chinese goods triggered a $200 billion crypto sell-off, while gold prices rose over 1% as investors flocked to traditional safe havens . The World Gold Council noted that tokenized gold's total trading volume exceeded $19 billion in Q2 2025, outpacing gold ETFs like SPDR Gold Shares (GLD) .

However, analysts caution that the rally may be nearing exhaustion. The World Gold Council's mid-year 2025 report predicts gold prices could consolidate or decline 12-17% in H2 if geopolitical risks ease and interest rates stabilize . A pause in Fed rate cuts could dampen gold's appeal as higher yields make bonds more attractive, while slowing central bank demand and consumer buying in China could curb further gains .

Comparisons between PAXG and XAUT highlight divergent strategies. PAXG's strict peg to physical gold and institutional-grade custody have attracted conservative investors, while XAUT's rapid supply expansions and DeFi integration have drawn liquidity-focused traders . Tether's Q2 attestation report, confirming XAUT's 7.66 tons of backing, bolstered market confidence, enabling it to surpass PAXG in trading volume .

For institutional investors, tokenized gold offers a hybrid solution. Unlike physical bullion, it provides 24/7 liquidity and blockchain transparency, while outperforming gold ETFs in redemption flexibility . However, PAXG's 430-token threshold for physical redemption and XAUT's reliance on Tether's reserves remain points of differentiation .

The World Gold Council's Gold Valuation Framework suggests gold's 2025 trajectory hinges on macroeconomic scenarios. A deterioration in global growth or prolonged dollar weakness could push prices 10-15% higher, while risk resolution might limit gains to 0-5% . With gold ETFs holding 3,616 tons as of June 2025-below the 2020 peak-there is room for further inflows, particularly from Chinese insurance companies and retail investors .

As tokenized gold competes with traditional assets, its adoption is being driven by institutional interest and regulatory clarity. JPMorgan's Onyx blockchain and BlackRock's RWA initiatives signal growing acceptance, while platforms like Paxos and Tether refine custody and redemption processes . Yet, challenges remain, including consumer demand moderation and recycling pressures, which could temper price gains .

Source: [1] PAX Gold (PAXG): Digital Gold's Safe Haven in the 2025 Crypto ... (https://www.thestandard.io/blog/pax-gold-paxg-digital-golds-safe-haven-in-the-2025-crypto-storm-12)

[2] Turbulences for Crypto, PAXG Token Shines Amid Market Crash (https://crispybull.com/crypto-market-crash-paxg-token/)

[3] Tokenized Gold Explained: PAXG, XAUT, and the 2025 Surge (https://alphabullion.com/blog/2025/8/tokenized-gold-is-on-the-rise-what.html)

[4] Tether Gold Surges Past PAXG Amid Record $437M Supply ... (https://magcrypto.net/tether-gold-surges-paxg-amid-record-437m-supply-expansion/)

[5] Trump Tariff Threat on China Sends Bitcoin Tumbling Below $119K (https://www.coindesk.com/markets/2025/10/10/trump-tariff-threat-on-china-sends-bitcoin-tumbling-below-usd119k)

[6] Trump Crashes Crypto Markets With 100% Tariff On China (https://beincrypto.com/trump-china-tariff-triggers-200-billion-crypto-crash/)

[7] China-US trade war 2025: Impact on stocks, crypto and ... (https://cointelegraph.com/explained/how-trade-wars-impact-stocks-and-crypto)

[8] BREAKING: U.S.-China Trade Deal Announced-What ... (https://cryptoticker.io/en/us-china-trade-deal-crypto-impact-2025/)

[9] US-China Tariffs Escalate, Impacting Cryptocurrency Market (https://theccpress.com/us-china-tariffs-impact-crypto-market-2025/)

[10] Gold Mid-Year Outlook 2025 | World Gold Council (https://www.gold.org/goldhub/research/gold-mid-year-outlook-2025)

[11] World Gold Council Predicts Modest Growth for Gold in 2025 (https://www.finance-monthly.com/world-gold-council-predicts-modest-growth-for-gold-in-2025/:~:text=Gold%20prices%20jumped%2028%25%20in%20the%20year%20through,council%20said%20in%20its%202025%20outlook%20released%20Thursday).