Key Facts: PAXG, one of the most well-known tokens of its type, reached its all-time high of $3,300. Bitcoin, despite being called digital gold, «crashed» along with traditional markets. Given the escalation of the conflict in Israel, the price of gold rose to $2,430 (USD), a new all-time high (ATH), driving up stablecoins that track its value. Tether Gold (XAUt), the gold-pegged stablecoin with the largest market capitalization, reached a new ATH of USD 2,500. Meanwhile, the next largest, Pax Gold (PAXG), experienced a greater rise due to high demand. As the following chart shows, PAXG reached the ATH of USD 3,300 on the Binance exchange. Although it should be noted that it only lasted minutes at that price and then fell back to around USD 2,375 on par with the precious metal.
PAXG price in the last three days. Source: TradingView. At the moment, Tether Gold has a market capitalization of USD 581 million, while Pax Gold of USD 434 million. This leaves them located in positions 123 and 158, respectively, in the ranking of the largest crypto assets. According to CoinMarketCap, the stablecoins anchored to the precious metal that follow in capitalization are below position 1,000 in the ranking of crypto assets. These are Comtech Gold (CGO), VX Gold (VNXAU), tGOLD (TXAU) and others. The last three tokens mentioned, unlike XAUt and PAXG, do not follow the price of gold per ounce, but per gram. That is why their prices are lower. Precisely, they reached the ATH of around USD 78.
Such movements occurred during midnight on Sunday after Iran's attack on Israel. As BitcoinDynamic reported, gold is considered a hedge asset against crises, which makes it tend to rise in price at times like this. «The shock caused by Iran's attack on Israeli territory apparently increased traders' appetite for the yellow metal, known as a safe haven in times of uncertainty,» he pointed Walter Bloomberg, specialist in global markets and geopolitical events.
The conflict in Israel causes movements in the markets
Amid the rise of the main precious metal, bitcoin (BTC), despite being called «digital gold», it fell in price along with traditional markets. In this sense, it is shown that it is being considered by investors as a risk asset. However, historically, bitcoin has also experienced upward reactions along with gold in periods of crisis, such as during the bankruptcies of large banks last year. This is because, like the precious metal, they are seen as a reserve of value due to their decentralized issuance, capacity for self-custody and protection of privacy. In this sense, both bitcoin and gold and the cryptocurrencies that follow its price could be driven upwards if macro uncertainty due to the Israeli conflict continues.