Gold ETF Inflows Propel PAXG, XAUT to New Heights Amid Crypto Downturn
14.04.2025 10:32
Gold ETF inflows hit a three-year high fueled by strong North American demand, leading investors to flock to tokenized gold assets for digital flexibility and price exposure. In the first quarter of 2025, inflows reached 226.5 tonnes and gold-backed cryptocurrencies experienced significant gains, with PAXG and XAUT rising approximately 24.15% and 23.7% year-to-date to new all-time highs above $3,300—closely tracking the performance of spot gold. In contrast, the broader cryptocurrency market has been in a downtrend, with Bitcoin (BTC) losing over 11% of its value this year and the overall market falling by just over 30% based on the CoinDesk 20 index. This divergence underscores a renewed flight to safety amid escalating geopolitical tensions, notably the U.S.-China trade war, as investors seek stable, physical asset-backed exposure to gold.
PAXG stands to benefit from the current influx into gold ETFs and rising investor interest in safe-haven assets. In the short term, immediate buying pressure may push prices higher, while long-term prospects are supported by global economic uncertainties and the historical resilience of gold-backed assets. Quantitative signals, such as net token minting and ETF inflow data, indicate a strong likelihood of continued price appreciation if current trends persist.
XAUT is expected to reflect similar dynamics as PAXG, with robust short-term gains driven by significant ETF inflows and sustained investor demand for physical gold exposure. The token's performance is likely to remain strong over the long term if geopolitical tensions continue, making it an attractive option for risk-averse investors. Historical trends demonstrate that gold-backed assets can outperform during periods of market stress, reinforcing its positive price outlook.
Bitcoin is currently facing negative pressure as it grapples with an overall market downturn, evidenced by an 11% year-to-date decline. In the short term, BTC's price is likely to remain suppressed due to prevailing risk-off sentiment and comparisons to the more stable gold-backed tokens. However, if the broader market sentiment stabilizes, there could be a deferred recovery on the back of BTC's historical ability to rebound after market corrections.
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