PAX Gold price

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One image to understand: Isn't PAXG pegged to gold 1:1? Why did it decouple? This time, $PAXG saw a dramatic spike that resulted in a double whammy for both bulls and bears, with high-leverage players losing millions of dollars overnight. Many entered the market lured by the safe-haven reputation of digital gold, only to take a big hit. Is PAXG really pegged to gold 1:1? Where are the risks hidden? 1. First, let's understand: What is PAXG? Can it really be used like gold? PAXG: It is an ERC-20 token issued by Paxos in 2019, with one core point: it claims to be pegged 1:1 to one ounce of London Good Delivery gold bars, which are stored in Brink's vaults and regulated by NYDFS. Sounds reliable, right? Its goal is clear: to digitize gold investment, eliminating the need to physically hold it, allowing for 24/7 trading, and enabling participation in DeFi, as well as the option to redeem real gold bars. But here’s the catch: PAXG is not gold itself; it is merely a digital certificate pegged to the gold price. Whether it can be redeemed and its stability depend entirely on the issuer, Paxos. It combines the stability of gold with the volatility of crypto, but it also brings along the risks from both sides. 2. In reality, PAXG is far from physical gold. Many people treat PAXG as online gold, but the two are fundamentally different. Let's clarify this from three key dimensions: Price volatility: Physical gold is priced by the global market, and even if it drops, it won't suddenly spike or crash; however, PAXG trades on crypto exchanges, and if liquidity dries up, it can crash — previously, it deviated from the gold price by over 20%. Such decoupling risks are nearly impossible with physical gold. Holding risk: PAXG is a token on the blockchain. If the blockchain network gets congested, or if Paxos encounters issues, the tokens in your wallet could just be a string of numbers. Counterparty reliance: Unlike physical gold, PAXG relies entirely on Paxos's integrity and gold reserves, which is akin to handing your money over to a third party. This represents typical counterparty risk. 3. Price volatility is just the tip of the iceberg! The three major fatal risks of PAXG. This liquidation event has exposed PAXG's vulnerabilities, and these three risks are scarier than short-term volatility: Liquidity crisis: The flash crash on October 11, 2025, was essentially a liquidity bottoming out — either there was a gap in buy and sell orders, or the market maker's algorithm malfunctioned, triggering a liquidation waterfall. High-leverage players couldn't react in time, and billions evaporated in an instant. Issuer default risk: Although Paxos publishes KPMG audit reports monthly to prove that gold reserves match the amount of PAXG, can audits guarantee that Paxos will never go bankrupt? Could the reserves be misappropriated? What about the timeliness and authenticity of the audit reports? These risks cannot be mitigated by audit reports. Crypto market contagion risk: Don't think that because PAXG is pegged to gold, it can be separated from the crypto market. When BTC crashed, PAXG fell as well; if another black swan event occurs in the crypto space, PAXG will likely crash too — its roots are still in the crypto world. In addition, smart contract vulnerabilities, hacking attacks, and high redemption thresholds are all looming threats. 4. Audits may only show the side people want to see! Many believe that PAXG is safe because it has monthly audits from KPMG and smart contract audits from CertiK. But folks need to be clear: Audits can only prove that at the moment of the audit, the gold reserves and the amount of PAXG are matched; they cannot guarantee that issues won't arise afterward; Audits can check for vulnerabilities in contracts, but they cannot assess market liquidity or control market maker operations; In short, audits are merely a means of increasing trust, not a risk firewall — don’t let the word "audit" make you let your guard down. To be frank, PAXG does provide a new option for gold investment, maximizing convenience, but it has never been a risk-free digital gold. This liquidation event has already sounded the alarm for everyone: in the crypto space, there are no assets that guarantee profits without risk, including this recent stable version decoupling.