With the trend of dollar depreciation continuing to deepen, the second quarter of 2025 becomes a critical turning point. In April, the dollar fell by more than 4.5% against major currencies in a single month, marking the largest decline in three years, and by the end of June, the dollar index had accumulated a drop of over 10% from its peak, the most severe half-year decline in half a century. Global investors are beginning to reassess their asset allocation strategies.
Especially in the crypto market, an increasing amount of funds choose to park in stablecoins (like USDT, USDC) to avoid short-term fluctuations while waiting for clearer market conditions. However, it is important to note that even though stablecoins are pegged to the dollar, when the dollar itself depreciates, their real purchasing power is also eroded, which is a blind spot that cannot be ignored for global asset allocators.
In this environment, what investors need is not just 'stability,' but also assets that possess 'anti-inflation and value preservation' capabilities. This is precisely the unique value of Paxos Gold (PAXG) in the crypto market.
What is $PAXG ?
PAXG (Paxos Gold) is a crypto asset issued by the regulated @Paxos company in the United States, with each PAXG token backed by 1 ounce of physical gold stored in a professional vault in London. In short, PAXG is a digital representation of gold, combining the advantages of both.
Gold's Anti-Inflation and Value Stability: Gold has historically been viewed as an asset against inflation and economic uncertainty.
Liquidity, Transparency, and Decentralized Trading Convenience of Crypto Assets: PAXG can be traded freely in the crypto market, enjoying all the advantages of digital assets.
Why is PAXG a smarter choice when the dollar weakens?
1. Avoiding Dollar Depreciation Risks
Although stablecoins like USDT are pegged to the dollar, when the dollar weakens, the purchasing power of the stablecoins you hold will also decline. In contrast, $PAXG is linked to gold $GOLD, which has historically been seen as a safe haven against currency devaluation. When gold prices rise, the value of PAXG will also increase, effectively hedging against the risks of a weak dollar.
2. Rising Gold Prices, PAXG Still Holds Potential
According to market analysis, by June 2025, the price of gold is expected to rise to $3,341 per ounce, showing strong performance. Some analytical institutions even predict that gold prices still have room to rise and may break through the $4,000 mark in the future.
Therefore, as a representation of gold, the growth potential of PAXG’s value is also worth looking forward to. In the long run, the price trend of PAXG may benefit from the growth of the gold market.
3. Widespread Use in the Crypto Market, Strong Liquidity
At major exchanges like Binance, PAXG can not only be easily bought and sold, but also serves as collateral in some decentralized finance (DeFi) protocols to earn yield. Compared to traditional gold, PAXG clearly has stronger liquidity and relatively lower transaction costs, making it particularly suitable for active participants in the crypto market.
Who is suitable to hold $PAXG?
1. Those holding large amounts of USDT, worried about dollar depreciation
For those investors who wish to avoid dollar depreciation risks, PAXG offers a more inflation-resistant alternative.
2. Those seeking relatively safe assets during market fluctuations
In the highly volatile crypto market, PAXG provides investors with a relatively stable asset, particularly suitable for preserving value during uncertain market times.
3. Those who are optimistic about gold in the long term but find it inconvenient to hold physical gold bars
For those who are optimistic about the growth of gold value but find it inconvenient to hold physical gold due to logistics, storage, or security reasons, PAXG is a very convenient and efficient choice.
Risk Warning: $PAXG is not risk-free
Although PAXG is backed by physical gold and its issuer is regulated, there are still certain risks associated with its investment. Investors should fully understand the following potential risks:
Gold Price Volatility: Gold prices are influenced by various factors, such as the global economic situation and geopolitical risks; a decline in gold prices will directly affect the value of PAXG.
Platform and Regulatory Risks: The trading and storage of PAXG rely on exchanges and wallet providers, and investors need to pay attention to the security of these platforms as well as changes in regulatory policies in various countries. For example, the tightening of regulations on crypto assets in the United States and other countries may affect the liquidity and market environment of PAXG.
Liquidity and Transaction Costs: In certain trading scenarios, buying and selling PAXG may face slippage issues or high transaction costs, especially in low liquidity markets, which may affect the efficiency of short-term trades.
Against the backdrop of the gradual devaluation of the dollar, holding crypto tokens linked to physical gold, such as PAXG, may be an effective means to hedge against currency risk. By transferring funds into gold-backed digital assets, investors can enjoy the liquidity and convenience of the crypto market while avoiding the risks brought by the depreciation of the dollar. Whether combating inflation or seeking asset preservation, PAXG offers investors a more robust investment option.
However, like any investment, PAXG is not without risks. Before deciding whether to invest, investors should conduct a thorough assessment based on their own risk tolerance and consider asset diversification to avoid potential losses from exposure to a single asset.