Gold ETF or Digital Gold? What Investors Need To Know
The post Gold ETF or Digital Gold? What Investors Need To Know appeared on BitcoinEthereumNews.com.
Alongside traditional gold ETFs like SPDR Gold Shares (GLD) or iShares Gold Trust (IAU), there is a new breed of blockchain-based gold instruments—most notably PAX Gold (PAXG) and Tether Gold (XAUT). These gold-backed cryptocurrencies offer direct exposure to physical gold while leveraging the programmability and portability of blockchain. Choose Digital Gold Like PAXG or XAUT if; You want programmable gold exposure or plan to use it in DeFi You prefer 24/7 liquidity You may want physical delivery of your gold Choose Gold ETFs if; You value strong regulatory oversight and simplicity You want to invest through your retirement account or brokerage You are unfamiliar with crypto wallet security Aspect Digital Gold (PAXG, XAUT) Gold ETFs (GLD, IAU) Asset Backing Fully backed by allocated physical gold (1:1) Backed by physical gold (allocated or unallocated) Ownership Direct claim on specific gold bars Share in a trust holding gold Regulatory Oversight Varies (e.g., NYDFS for PAXG, El Salvador for XAUT) Strict (SEC and financial authorities) Tradability 24/7 on crypto exchanges Standard market hours via stock exchanges Liquidity High (varies by token & exchange) Very high – heavily traded instruments Minimum Investment Very low (fractional tokens) One share (e.g., ~$180 for GLD) Custody/Storage Fees No direct custody fees (cost baked into price) Annual management fee (0.25%–0.40%) Blockchain Transparency Yes – on-chain verification & audit tools No – traditional audits only Physical Redemption Yes (min. ~430 tokens, via issuer) No redemption for physical gold DeFi Use Yes – staking, lending, collateral No – incompatible with DeFi Jurisdiction Risk Depends on issuer (e.g., Paxos in US, Tether in El Salvador) Low – typically US-regulated Audit Frequency Monthly (PAXG) or Quarterly (XAUT) Annual or semiannual Fees & Spreads Lower for large transactions, exchange spreads vary Low spreads, stable fee structure Ownership and Custody: Tokens vs Shares XAUT,…
Filed under: News - @ May 4, 2025 3:25 am