The ounce of gold rose to its highest price in history this week and, for its part, the token that follows its price was very close to its record.
Gold reached its highest historical price this week, which caused the stablecoin Pax Gold (PAXG) to become one of the five best-performing cryptocurrencies these first days of May.
PAXG rose 2.83% while gold it reached its maximum price in history at US$2,043.
Pax Gold is a token that was created to represent the price of one ounce (31 grams) of a gold bar. Is a stablecoin that is pegged to the price of gold and fluctuates based on gold price fluctuations.
The token was developed by Paxos, a company that operates in different segments of the crypto world, creator of the Pax Dollar (USDP), an asset linked to the price of the US dollar.
That a token is backed means that, for each token issued, there is an equivalent asset that guarantees the liquidity of that token. In the case of PAXG, this means that for each token issued there is a physical reserve of this asset that is deposited in a bank.
PAXG had its maximum price that almost three years ago. It was precisely when in August 2020 gold reached $2,058, a price very close to the current one. The difference may be due to the fact that although stablecoins follow the price of the underlying asset, they can have slight variations.
Source: Ambito
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