The token’s bull run is heavily fueled by the U.S. government shutdown.
As of October 31, popular cryptocurrencies such as Bitcoin (CRYPTO: BTCUSD) and Ethereum (CRYPTO: ETH) have experienced significant price drops throughout the month, which could spook investors more than Halloween itself. However, there’s one crypto that has been on a tear for the month, reaching all-time highs nearly every day. It’s a stablecoin, but vastly different from the common ones.
PAX Gold (CRYPTO: PAXG), one of the few stablecoins backed by gold, reached an all-time high of $4,765 on October 16. This is vastly different from common stablecoins, such as Tether (CRYPTO: USDT) and USD Coin (CRYPTO: USDC), which are pegged to the U.S. dollar and primarily maintain a price of $1. The PAXG token was built to be worth the same amount as a London bar of gold, so it will maintain a value that’s close to the price of one troy ounce of the metal. However, the crypto and the commodity will never be the same price, as the digital token is subject to transaction and network fees, as well as unique fluctuations in price and demand, which can alter the price.
Gold is widely considered a hedge against the U.S. dollar, which is still the world’s primary reserve currency. And as of October 31, the government shutdown has persisted for 32 days , while President Donald Trump confirmed that day that the U.S. and China are in a prolonged trade war. Therefore, the dollar has weakened, which is common during times of geopolitical tension and economic uncertainty. Gold and many other metals have skyrocketed in price, allowing PAX Gold to essentially go along for the ride.
PAX Gold typically stays within a range of about $50 below or above an ounce of gold, offering much more stable prices compared to other cryptos. However, because it’s on a blockchain, there are rare occurrences where demand for the coin can change so rapidly, its price can fluctuate just as much. Gold simply isn’t as easy to trade or purchase on available exchanges or over-the-counter (OTC) markets. PAXG on the other hand, can be traded almost instantly on the Ethereum blockchain through popular crypto exchanges. One example of this was on Saturday, April 14, 2025, when geopolitical tension in the Middle East spiked that day. PAXG skyrocketed as high as 34% due to a rush in demand, before it restabilized and closed the day with a 4% gain. The token was much more accessible to purchase and trade than gold, especially because most non-crypto exchanges are closed on the weekend.
Investors should also be wary of the security risks associated with cryptocurrencies. Congestion on the Ethereum blockchain can not only potentially slow down transaction speeds, but it also increases the purchase fees slightly. Also, on the rare occasion that a crypto exchange or someone’s private crypto wallet gets hacked, crypto funds could be depleted. So investors should keep their passwords/private keys secure while also trying to avoid phishing scams.
There have been no signs that the ongoing trade wars and government shutdown are nearing an end. And even if the shutdown were to end today, federal agencies would have weeks and potentially months of economic data to catch up on and report, because the employees who collect that data aren’t currently working. Thus, economic uncertainty surrounding the dollar is likely to persist throughout at least the end of 2025, and PAXG is a buy right now for the short-term. And because gold is historically an appreciating asset, the digital token is also a great long-term investment.
When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 1,062%* — a market-crushing outperformance compared to 194% for the S&P 500.
Adé Hennis has positions in Bitcoin, Ethereum, and USD Coin. He has no positions in PAX Gold and Tether.
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