With the crypto-asset market collapsing due to war and inflation, a new class of risk-fuelled crypto-assets has shined brightly in a newer form than the stablecoins that are usually pegged to the dollar to reduce volatility.
According to Arab Net, Pax Gold, the largest of these coins, made a 7.4% jump, while its largest competitor, Tiger Gold, rose 8.5%. By contrast, Bitcoin lost more than 13% and Ether fell 20%.
“One of the main concerns for many newcomers to crypto assets is that they are not backed by anything,” said Everett Millman, chief market analyst at Gainesville Queens. They only appear on screen..so linking them or making them relate to a commodity in the real world makes sense.
The demand for gold is not surprising, as it is a traditional way to hedge against geopolitical turmoil and inflation. However, the demand for gold-backed cryptocurrencies is a new trend.
Stablecoins are a rapidly growing class of crypto assets that have emerged as a common medium of transactions, often used by dealers seeking to move funds. It is easier to exchange major stablecoins for, for example, Bitcoin or other cryptocurrencies than to exchange traditional funds like dollars for Bitcoin.
However, gold-backed currencies are still emerging assets that attract only a small segment of the crypto-asset market today, with Pax Gold and Tiger Gold barely more than two years old, with little liquidity and little certainty about their long-term prospects.
Pax Gold's market value nearly doubled to $627 million this year, and Tiger Gold's market value rose 9% to more than $209 million
