Amid Wall Street Rout, Gold-Backed Cryptocurrencies See Post-High Cooldown

Gold-Backed Crypto Tokens Slip From Highs as Market Chaos Sparks Broad Liquidations

Gold-pegged cryptocurrencies, including Paxos Gold (PAXG) and Tether Gold (XAUT), backed off from their record highs on Friday as investors responded to sweeping market turmoil triggered by fresh U.S. trade tariffs.

After President Donald Trump announced a wave of reciprocal tariffs mid-week, gold-linked tokens initially surged, briefly outpacing spot bullion. PAXG hit $3,191 and XAUT climbed to $3,190, both above gold’s $3,167 peak. However, the risk-off momentum quickly reversed as the broader sell-off deepened.

As margin calls and liquidity demands accelerated, even traditionally defensive assets like gold and its crypto derivatives weren’t spared. PAXG dropped to $3,074, and XAUT slipped to $3,064, with gold spot prices retreating to $3,038 per ounce.

The downturn coincided with massive equity losses: the S&P 500 suffered one of its worst single-day declines since 2020, and the Nasdaq 100 posted a record point loss, according to The Kobeissi Letter. The MSCI World Index extended its slide with a 4.3% drop on Friday following a 3.7% fall on Thursday, erasing trillions in global market capitalization.

Still, despite the recent pullback, gold-backed cryptocurrencies remain resilient—up 17% year-to-date. Factors contributing to the rally include expectations for U.S. interest rate cuts, continued Asian demand, and aggressive gold accumulation by central banks.

In February, net central bank gold purchases totaled 24 metric tons. Poland led with a 29-ton addition, boosting its gold reserves to 480 tons—now one-fifth of its total foreign holdings. China, Turkey, Jordan, and Qatar also grew their reserves.

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