Investors rotated their capital to gold and its on-chain derivatives last week amid a sharp slowdown in the cryptocurrency market
‘Digital Gold’ Rises
Physical gold-backed cryptocurrencies, such as Tether Gold (CRYPTO: XAUT) and PAX Gold (CRYPTO: PAXG), jumped over 4% in the last 7 days.
The two were were the fifth and sixth-largest gainers last week, bucking the broader sell-off in coins with much larger market capitalizations.
These coins mirrored the gains of spot gold, which traded up 3.72% over the past week to $4,095.
Note that these cryptocurrencies provide ownership on a 1:1 basis of one fine troy ounce of gold on a physical bar of gold.
| Asset | 7-Day Gains +/- | YTD Gains +/- | Price (Recorded at 3:30 a.m. ET) |
| Tether Gold | +4.8% | -5.5% | $4,080.43 |
| Pax Gold | +4.4% | -5.7% | $4,084.43 |
| Bitcoin | -5.5% | -15.40% | $74,127.04 |
| Ethereum | -8.5% | -28.90% | $2,105.75 |
Meanwhile, Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH), were down 5.5% and 8.50%, respectively, over the week.
It’s worth noting that gold tokens have also outperformed blue-chip currencies year to date.
What’s Dragging Crypto Back?
The cryptocurrency’s decline was driven in part by a massive $6.7 billion hack at Binance, which sent shockwaves through the industry and by Democratic wins in the midterm elections.
Investors are coming to terms with the changes in Washington, where Democrats won the Senate and the House of Representatives. Sen. Elizabeth Warren (D-Mass.), a top cryptocurrency critic, is expected to chair the Senate Banking Committee.
As of this writing, "Fear" sentiment prevailed in the market, according to the Crypto Fear & Greed Index.
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