Why did the price of PAXG fall?

PAX Gold (PAXG) dropped 2.6% in the last 24 hours, underperforming both gold, which fell 0.97%, and the broader cryptocurrency market, which gained 1.64%. The main reasons for this decline are:

1. Gold’s Price Drop – The spot price of gold fell to $4,058.19, pulling PAXG down with it.
2. Concerns About Custody – Binance’s CEO, CZ, criticized tokenized gold as risky “trust-me-bro” IOUs, leading some investors to sell.
3. Technical Weakness – PAXG broke below a key support level at $4,005, with technical indicators showing bearish signals.

Deep Dive

1. Gold’s Sharp Decline (Negative Impact)

Gold’s spot price fell nearly 1% to $4,058.19 on October 22, 2025, marking its biggest two-day drop since 2013 and wiping out about $2.5 trillion in market value. Since PAX Gold (PAXG) is designed to track the price of physical gold one-to-one, it followed this downward trend.

This drop suggests that investors are moving away from gold as a safe haven, instead favoring assets like Bitcoin, which rose 1.5% to $109,483, and stocks. Because PAXG’s value depends directly on gold’s price, it is sensitive to these broader market shifts.

2. Custodial Trust Concerns (Negative Impact)

Binance founder CZ criticized tokenized gold, pointing out that it depends on third-party custodians like Paxos to hold the actual gold. He described these tokens as “trust-me-bro” assets, implying that investors must trust the custodian to back the tokens properly. This criticism raised concerns about the risk of not being able to redeem tokens for physical gold during a crisis.

As a result, some investors may prefer Bitcoin, which allows for self-custody (holding your own coins without a middleman), or Bitcoin exchange-traded funds (ETFs), which have a large amount of assets under management ($149.53 billion), as safer hedges against inflation.

3. Technical Weakness (Negative Impact)

From a technical analysis perspective, PAXG fell below an important support level at $4,005.93, known as the 61.8% Fibonacci retracement. It is also trading below its 7-day simple moving average (SMA) of $4,138.79. The Relative Strength Index (RSI) is at 39.37, indicating the token is oversold but without signs of a rebound yet.

This suggests that the downward momentum could continue, potentially pushing PAXG’s price down to around $3,883, the next key support level. For PAXG to stabilize, it needs to recover above the $4,005 mark soon.

Conclusion

The recent drop in PAX Gold (PAXG) reflects a combination of gold’s price challenges, concerns about the trustworthiness of custodial models, and negative technical signals. While PAXG offers a way to invest in gold through cryptocurrency, its dependence on gold’s price and centralized vaults makes it more volatile.

Key point to watch: Will gold’s price hold above $4,000 per ounce? If so, it could help restore demand for PAXG.

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What could affect the price of PAXG?

PAX Gold (PAXG) price moves between gold’s reputation as a safe investment and the trust issues common in cryptocurrency.

1. Gold price swings – PAXG tracks the price of gold, which faces mixed predictions.
2. Trust in custody – Confidence in Paxos’ gold reserves and redemption process is key.
3. Competition from Bitcoin – Growing Bitcoin use might reduce interest in tokenized gold.

In-Depth Look

1. Gold Price Swings (Mixed Effects)

What’s happening: PAXG is backed 1:1 by physical gold, so its price closely follows gold’s market value. Gold recently reached $4,200 per ounce (October 2025), but some experts, like HSBC, predict it could drop to $3,355. Factors like the strength of the U.S. dollar, inflation, and global tensions influence gold’s demand as a safe investment.

What this means for PAXG: If gold prices rise, PAXG’s value will likely increase. But if the Federal Reserve raises interest rates or investors feel less need for safe assets, gold prices could fall, pulling PAXG down too. Recently, PAXG’s price dropped 8% in a week, more than gold’s 6% decline, showing that crypto-related risks can make its price more volatile (CryptoSlate).

2. Custody and Regulatory Risks (Negative Impact)

What’s happening: PAXG depends on Paxos, the company holding the physical gold, to honor redemptions—meaning exchanging tokens for actual gold. Some critics call tokenized gold a “trust-me-bro” asset because you have to trust the company. For example, Paxos froze 11,184 PAXG tokens linked to the FTX exchange in 2022. Regulators require monthly audits by firms like KPMG, but delays or problems in redeeming gold could hurt trust.

What this means for PAXG: If Paxos fails to deliver gold or regulators step in with strict rules (like the New York Department of Financial Services), investors might sell off PAXG quickly. A recent 325% jump in trading volume over 24 hours (October 2025) suggests the market can become unstable during stressful times (CryptoNews).

3. Bitcoin as a Competing Safe Haven (Negative Impact)

What’s happening: Bitcoin has gained 150% this year, compared to gold’s 100%, and has attracted $149 billion in spot ETF investments. This makes Bitcoin a popular digital alternative to gold. The correlation between gold and Bitcoin prices has dropped to 0.19 in 2025, indicating investors might choose Bitcoin during market upswings, reducing demand for PAXG.

What this means for PAXG: If more institutions adopt Bitcoin, PAXG could see money flow out. Still, gold’s massive $30 trillion market value provides some protection against this shift (Yahoo Finance).

Conclusion

PAXG’s future depends on gold’s overall market trends, how well Paxos manages its operations, and Bitcoin’s growing role as a store of value. While regulatory oversight and gold’s long history offer stability, risks tied to the crypto world and competition from Bitcoin remain significant. Will PAXG maintain investor trust better than Bitcoin can attract it? Keep an eye on gold’s $4,000 support level and Bitcoin’s market dominance.

What are people saying about PAXG?

PAX Gold (PAXG) is closely tied to gold prices, with traders watching for potential price breakouts while some warn of overbought conditions. Here’s what’s happening right now:

1. Bullish technical setups aim for $3,900 if gold prices hold steady
2. Institutional investments are increasing amid economic uncertainty
3. Overbought RSI signals suggest a possible price pullback

In-Depth Look

1. Institutional Demand Drives Bullish Outlook Toward $3,800

According to @genius_sirenBSC, PAXG is gaining trust from large investors. They note, "PAXG benefits from institutional trust... support at $3,600 could propel it to $3,900 if gold stays strong."
– @genius_sirenBSC (12.3K followers · 48K impressions · 2025-09-22 17:24 UTC)
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What this means: This is positive news for PAXG. Gold prices have risen 47% so far this year, and with more institutions adopting PAXG (its market value reached $1.15 billion in August 2025), momentum is building. Keep an eye on the $3,600 support level as a key price point.

2. DeFi Integration Adds Utility but Liquidity Remains a Challenge

DeFi expert @DefiIgnas shares, "Gold stables like PAXG now offer 9.3% yield on Fluid... but liquidity gaps remain vs fiat stables."
– @DefiIgnas (89K followers · 212K impressions · 2025-06-18 13:09 UTC)
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What this means: This is a neutral development. While PAXG offers attractive yield opportunities (9.3% on Fluid), it still faces liquidity challenges compared to traditional stablecoins. For example, trading $1 million in PAXG can experience a 0.76% price slippage, which is higher than fiat-backed stablecoins.

3. Technical Patterns Suggest Short-Term Rally Possible

An anonymous trader posted on CoinMarketCap, "PAXG holds $3,336 support... breakout above $3,340 may trigger 0.4% surge."
– 3.2K impressions · 2025-07-30 09:15 UTC
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What this means: The technical outlook is positive. The price pattern shows signs of accumulation with higher lows, indicating buying interest. However, the trading volume is relatively low (8.31 million PAXG traded), so confirmation is needed before expecting a strong move.

4. Overbought RSI Signals Risk of Price Correction

A Finbold article highlights, "PAXG’s 24h RSI hit extreme overbought levels... reversal likely if gold stalls."
– Market analysts (Oct 15, 2025)
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What this means: This is a bearish warning for the short term. The Relative Strength Index (RSI) above 85 has historically led to 5-8% price corrections in PAXG. Traders are closely watching the $3,800 resistance level for signs of a reversal.

Conclusion

The outlook for PAX Gold (PAXG) is mixed. On one hand, gold’s strong macroeconomic factors and growing institutional interest support its long-term potential. On the other, technical indicators like the RSI suggest caution due to possible overbought conditions. DeFi applications and a tokenized gold market exceeding $3 billion add to its appeal. Currently, the 24-hour RSI is at a neutral 42 (as of October 27), indicating balanced momentum.

Watch the price range between $3,600 and $3,800 closely. A break above this zone could confirm bullish targets near $3,900, while failure to hold support might lead to a dip toward the 50-day moving average around $3,512. Also, keep an eye on COMEX gold futures for broader market signals.

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What is the latest news about PAXG?

PAX Gold (PAXG) is navigating questions about trust and market ups and downs while working to make gold investment more accessible. Here’s the latest update:

1. Binance CEO Calls PAXG a “Trust-Me-Bro” Token (Oct 23, 2025) – Binance founder Changpeng Zhao (CZ) challenged PAXG’s claims of decentralization, sparking a debate in the crypto community.
2. PAXG Drops 6% as Gold Prices Fall (Oct 21, 2025) – The token’s value fell sharply, following gold’s biggest daily drop since 2013 amid a shift toward riskier assets.
3. Redemption Challenges Highlighted (Oct 24, 2025) – An analysis showed that redeeming PAXG for physical gold involves third-party custodians and high minimum amounts, raising concerns about trust and accessibility.

In-Depth Look

1. Binance CEO Calls PAXG a “Trust-Me-Bro” Token (Oct 23, 2025)

Summary:
Changpeng Zhao (CZ), the founder of Binance, criticized PAXG’s setup, saying that tokenized gold depends on centralized custodians rather than being fully decentralized like Bitcoin. His comments were aimed at platforms like Peter Schiff’s Shift Gold, which also plans to tokenize physical gold. CZ pointed out that PAXG holders have to trust the issuer to deliver gold during tough times, unlike Bitcoin’s system that doesn’t require trust in any single party.

Why it matters:
This discussion brings attention to the risks involved with PAXG’s custodial model. It may push issuers to be more transparent. Although PAXG’s market value remains strong at $1.3 billion (as of October 2025), critics say its growth depends more on trust in institutions than on blockchain principles. (Read more at Cryptonews)

2. PAXG Drops 6% as Gold Prices Fall (Oct 21, 2025)

Summary:
PAXG’s price fell to $4,120, down 6%, mirroring gold’s biggest intraday drop since 2013. This happened as Bitcoin surged to $112,000, indicating investors were moving money into riskier assets like cryptocurrencies. During this sell-off, PAXG’s trading volume jumped to $411 million in 24 hours.

Why it matters:
This shows how closely PAXG’s price follows gold. While it can act as a safe investment during uncertain times, its appeal decreases when investors prefer cryptocurrencies or stocks. Watching gold’s $4,100 support level can help predict PAXG’s short-term price moves. (More details at Crypto.news)

3. Redemption Challenges Highlighted (Oct 24, 2025)

Summary:
A report by CryptoSlate found that redeeming PAXG for physical gold requires working with custodians and logistics partners, with minimum redemption amounts as high as 430 ounces (about $1.7 million). Unlike Bitcoin ETFs, PAXG doesn’t offer cryptographic proof of reserves and relies on monthly audits by KPMG.

Why it matters:
This points to operational challenges with PAXG. While it makes investing in gold easier, the complicated redemption process and risks like the 2022 incident where Paxos froze tokens linked to FTX may discourage users who prioritize decentralization. (Read the full analysis at CryptoSlate)

Conclusion

PAXG is under increasing scrutiny for its custodial approach but continues to serve as a link between traditional gold investment and the crypto world. With gold’s outlook looking positive and tokenization gaining momentum, the key question is whether PAXG can balance the need for trustlessness with the demands of institutional investors. Keep an eye on how issuers respond to redemption concerns and how gold’s $4,100 support level holds.

What is expected in the development of PAXG?

PAX Gold (PAXG) is making steady progress with several key developments:

1. OKX Spot Listing (October 14, 2025) – PAXG is now available for trading on the OKX exchange, making it easier for more people to buy and sell.
2. BTSE Futures Contract Update (May 18, 2025) – The futures contract size was lowered, allowing smaller traders to participate.
3. DeFi Collateral Expansion (2025–2026) – PAXG is being added to decentralized finance (DeFi) platforms like Aave, where it can be used as collateral to earn interest.
4. Institutional Redemption Partnerships (2026) – New partnerships will allow investors to redeem PAXG for smaller amounts of physical gold, making gold ownership more accessible.

Deep Dive

1. OKX Spot Listing (October 14, 2025)

What happened:
PAXG became available for spot trading on OKX starting October 15, 2025, with deposits opening the day before. OKX is a major global exchange with over $25 billion in daily trading volume.

Why it matters:
This listing increases PAXG’s visibility and makes it easier for a wider audience to trade. More trading options usually mean better liquidity, which is good for investors. However, the overall impact depends on the broader market conditions.

2. BTSE Futures Contract Update (May 18, 2025)

What happened:
BTSE lowered the minimum size of its PAXG perpetual futures contract from 0.01 to 0.0001 PAXG. Trading resumed on May 18 after a short pause.

Why it matters:
Smaller contract sizes let more retail traders participate in futures trading, which can help increase market activity and liquidity. However, changes like this can cause short-term price swings.

3. DeFi Collateral Expansion (2025–2026)

What happened:
PAXG is being integrated into DeFi platforms such as Aave and Curve, allowing holders to use PAXG as collateral to borrow or earn interest. This builds on earlier partnerships with Fluid and Genesis Lending.

Why it matters:
This adds practical uses for PAXG beyond just holding it as digital gold. Users can now earn yield, making PAXG more attractive. On the flip side, since gold itself doesn’t generate interest like some stablecoins, demand might be limited.

4. Institutional Redemption Partnerships (2026)

What happened:
Paxos is working with partners like Alpha Bullion to let investors redeem PAXG for smaller physical gold products, such as 1-gram bars, instead of only large bars (currently 430 PAXG minimum).

Why it matters:
This lowers the barrier for retail investors who want to convert digital gold into physical gold in smaller amounts. The success depends on how well the logistics and partners can handle this.

Conclusion

PAX Gold’s roadmap aims to boost liquidity, expand its use in DeFi, and make gold ownership more accessible to everyday investors. Its strength lies in regulatory compliance and the stability of gold’s value. However, it faces competition from other digital gold tokens like Tether Gold (XAUt) and is influenced by the overall gold market’s ups and downs. The key question is how PAXG will balance trust from big institutions with the open, permissionless nature of decentralized finance.

What updates are there in the PAXG code base?

Recent updates to PAX Gold’s (PAXG) codebase have not been publicly highlighted.

1. No Major Code Changes in 2025 – There have been no significant software updates, protocol improvements, or security fixes announced.
2. Focus on Regulatory Compliance – The priority is on audits and transparency of gold reserves rather than technical development.
3. New Exchange Listings & Improved Liquidity – PAXG was added to OKX, WOO X, and Bitso, making it easier to buy and sell, without changing the underlying code.

Deep Dive

1. No Major Code Changes in 2025

Overview: PAX Gold is an ERC-20 token, meaning it runs on the Ethereum blockchain and represents ownership of physical gold. Its main value comes from the gold backing, not from frequent software updates. In 2025, there have been no notable updates to its code, smart contracts, or protocols.

What this means: This is neither good nor bad for PAXG. Since its value depends on gold reserves and regulatory trust, not on new technology, the lack of updates doesn’t harm its core purpose. However, it may limit how well PAXG can integrate with decentralized finance (DeFi) platforms that often require more advanced or flexible programming.

2. Focus on Regulatory Compliance

Overview: Paxos, the company behind PAXG, continues to prioritize regulatory oversight. They conduct monthly third-party audits to verify gold reserves and comply with New York Department of Financial Services (NYDFS) regulations. Recent efforts have focused on transparency reports and secure custody of gold rather than software changes.

What this means: This is a positive sign for PAXG. Strong regulatory compliance builds trust, making it attractive to traditional investors looking for a stable, “safe haven” asset. On the downside, focusing mainly on compliance and less on technical innovation might slow adoption in the fast-evolving decentralized finance space.

3. New Exchange Listings & Improved Liquidity

Overview: PAXG has been listed on several exchanges recently, including OKX (October 2025), WOO X (April 2025), and Bitso (since 2022). These listings improve how easily traders can buy and sell PAXG but don’t involve changes to the token’s code.

What this means: This is good news for PAXG holders. More exchange listings mean better liquidity, which helps reduce price swings and makes trading smoother. However, relying on centralized exchanges may limit opportunities for innovation that come from fully decentralized platforms.

Conclusion

PAX Gold’s development strategy focuses on maintaining regulatory trust and expanding market access rather than updating its technology. This approach supports its role as a stable, gold-backed asset but may hold it back from deeper integration with decentralized finance. The key question is how PAXG can balance its appeal as a traditional asset with the need to innovate within the blockchain ecosystem.