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(Kitco News) – Cryptocurrencies are in the midst of one of their worst weeks in history as the collapse of FTX – which just last week was a top three crypto exchange – has sent token prices plummeting as investors from all walks of life got caught up in the turmoil.
Amid the scramble to maintain value, gold-backed tokens have outperformed the field in the face of collapsing valuations as investors are finally starting to rediscover the value that the precious metal holds during times of economic strife.
Since last Friday, the yellow metal has been on a tear higher, climbing from a low of $1,628.40 to a high of $1,766.92 in trading today, marking a gain of 8.51% over a seven-day span. During that same time period, Pax Gold (PAXG) saw its price rise from $1,624.93 to a high of $1,767.30, largely tracking the price of physical gold.
Each (PAXG) token is backed by one fine troy ounce of a 400 oz London Good Delivery gold bar, stored in Brink’s vaults, so it makes sense that its value would closely mirror the price movements in gold.
Similarly, the gold-backed token offered by Kitco, KGLD, has seen its price increase in lockstep with the rise in the value of the precious metal, offering the wealth-sustaining capabilities of gold with the ease of use made possible by blockchain technology.
With the FTX saga showing no signs of abating anytime soon, and many analysts predicting more downside ahead following Friday’s Chapter 11 bankruptcy protection filing by the embattled exchange, it may be gold’s time to shine in both crypto and the traditional markets as global economic conditions remain on shaky ground.
Polygon brushes off the downturn
When it comes to which cryptos have held up best amid the selling onslaught, Polygon (MATIC) has emerged as one of the more resilient protocols as the layer-two scaling solution has benefited from several recent announcements.
Last Thursday, Instagram’s parent company Meta announced that it had partnered with the Polygon network to allow users to mint and sell non-fungible tokens (NFTs) on the popular social media platform.
Yesterday, the network revealed that is working with Disney to develop a proof of concept for exclusive digital collectibles.
The MAGIC continues! ???
Polygon is working w/ @WaltDisneyCo after participating in @DisneyAccel ????????
For starters, we’re developing a proof of concept for EXCLUSIVE digital collectibles to recognize Disney employees during special occasions ?
— Polygon – MATIC ?? (@0xPolygon) November 11, 2022
As a result of these major partnership announcements, the MATIC token has managed to hold up nicely in the face of widespread market carnage. Data from TradingView shows that the token is currently trading at $1.03, an increase of 23% since November 2.
MATIC/USD 4-hour chart. Source: TradingView
While MATIC remains in the green for the month of November, it’s worth noting that it wasn’t unaffected by the FTX drama, as its price has fallen 21% from a high of $1.30 that was reached following the Meta partnership announcement.
That said, the recent moves by the project have helped increase its level of resiliency as the protocol offers a valid use case that can attract new participants into the crypto ecosystem, which will benefit the space as a whole.
“The value added to the creator economy is unmatchable and championing verifiable digital ownership on a platform with such reach will help us further our goal of onboarding the next billion users to Web3,” Sandeep Nailwal, the co-founder of Polygon said in a tweet.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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