> During the recent crisis in the Middle East over the weekend of April 13-15, 2024, PAXG, the leading tokenized gold product, traded at a remarkable 20% premium compared to the spot price of gold (XAU), spiking past $2,850. This phenomenon can be attributed to several factors: > - Traders cycled out of risk-on crypto assets into PAXG as an onchain safe haven. Why? This makes no sense to me. If you want to be in an onchain safe haven, you can't cycle into USDC or any other stablecoin? Isn't the RWA gold as much subject to the issuer counterparty risk as is USDC?
It is the gold. The demand probably comes from the Middle East as well. Paxos used to have reserves in the Grand Bazaar, too, as far as I recall. PAXG when it comes to the gold is more liquid a la proof-of-reserves. Tether's gold is rather a new product. I assume it also means that they are OK with their money being on the "onchain street" and they just wanted to hedge it behaviorally most secure approach. Again, you know, it's always the word-of-mouth, too. There are many FUDs and past de-pegs around any stablecoins. Gold in the current uncertainty ennvironment, at least till November, is the apparent "wisdom of crowds". It's all psychocybernetics IMHO.