With gold soaring in value, is now the time to consider gold-backed cryptocurrencies?
While Bitcoin has easily been the top-performing cryptocurrency of the past decade, it’s not the best cryptocurrency to buy right now.
Instead, that distinction belongs to Pax Gold (PAXG 0.87%), a stablecoin that is pegged 1-to-1 to the price of gold. Just as gold is up 74% this year, so is Pax Gold. If you’re looking to put $500 to work right now, gold is the place to be.
What is a gold-backed stablecoin?
While the majority of stablecoins are pegged 1-to-1 to the U.S. dollar, there are some stablecoins that are pegged to other fiat currencies, such as the euro or yen. In addition, it’s possible to peg a stablecoin to the price of a commodity or precious metal.
That’s where gold-backed stablecoins enter the picture. Right now, there are two gold-backed stablecoins that rank among the top 50 cryptocurrencies in the world by market cap: Tether Gold and Pax Gold. Both now have market caps in excess of $1.6 billion. My personal preference is Pax Gold, simply because Tether Gold is not available on every U.S.-based cryptocurrency trading platform.
Image source: Getty Images.
What makes these two stablecoins so interesting is that they don’t trade for $1, as you might expect with a traditional dollar-pegged stablecoin. Instead, they trade for the price of gold. Thus, the current price of Pax Gold is $4,563. As the price of gold continues to soar, so should the price of Pax Gold.
The easiest way to think about Pax Gold is that it is physical gold, held and managed on a blockchain. That’s because Pax Gold is actually a crypto token on the Ethereum blockchain. Each Pax Gold token is backed by 1 fine troy ounce of gold, stored in a London gold vault.
If you own PAXG, you own the underlying physical gold, held in custody by Paxos Trust Company, which is a New York-regulated financial institution. That means that you should be able to exchange Pax Gold for physical gold at any point in time, no questions asked.
Why not just buy a gold ETF?
Of course, there are different ways to get exposure to gold these days. You could, for example, walk into a Costco Wholesale and pick up a gold bar.
But far more likely, you’d simply buy a share in a gold exchange-traded fund (ETF), such as the iShares Gold Trust or SPDR Gold Shares. Why go to all the hassle, expense, and security risk of hiding a gold bar under your bed when you can simply get exposure to gold via the SPDR Gold Shares ETF?
Theoretically, investing in a gold-backed stablecoin is even better than investing in a gold ETF. For example, if you acquire PAXG, you’re no longer paying annual management expenses on an ETF. PAXG offers direct ownership of physical gold, the potential for fractional ownership, as well as 24/7 trading. Over time, these advantages can really add up, leading some to think that gold ETFs could face a real competitive threat from gold-backed stablecoins.
Before you invest in Pax Gold
Just keep in mind: As gold goes, so goes Pax Gold. Yes, gold is having a banner year in 2025, but there are no guarantees that this same kind of performance will repeat in 2026. Simply put, Pax Gold may not be a world-beater for much longer.
Today’s Change
(-0.87%) $-37.97
Current Price
$4330.90
Key Data Points
Market Cap
$1.6B
Day’s Range
$4302.28 – $4379.46
52wk Range
$2611.15 – $4573.52
Volume
251M
If you look at a long-term chart for Pax Gold, this becomes apparent immediately. Almost out of nowhere, Pax Gold has been skyrocketing in price since 2024. Just as gold is soaring to new all-time highs, so is Pax Gold.
That’s why I can’t emphasize enough: Pax Gold is a cryptocurrency to buy right now. Almost every major cryptocurrency — including both Bitcoin and Ethereum — is down for the year. That means investors need to be creative heading into 2026.
Pax Gold is a rarity in the crypto world — it’s an asset that’s capable of soaring in value, while also offering the same type of downside risk protection as gold. At a time when Bitcoin has disappointed crypto investors, it might be worth a closer look at Pax Gold, the real “digital gold.”