Hyperliquid whales get active trading PAXG as gold inches toward $5,000

Traders on Hyperliquid shifted to tokenized gold, putting it among the top 10 most actively traded assets. Whales are predominantly long on gold. 

Hyperliquid has become a venue for tokenized gold, putting PAXG among the top 10 most traded assets. As gold reached new records, while BTC lagged, traders used the available on-chain infrastructure to switch to the more actively appreciating asset. 

Traders have shown renewed interest in tokenized metals, as gold approached $5,000 while BTC lagged. 

PAXG traded at a premium to spot gold, becoming one of the most bullish tokens on Hyperliquid. | Source: Coingecko

PAXG is one of the two major tokenized gold tokens, in addition to Tether’s XAUT. The asset was selected for derivative trading on Hyperliquid, lining up among blue-chip crypto coins. 

Hyperliquid traders go long on gold

Hyperliquid whales built long positions on PAXG, taking up over 89% of open interest. PAXG open interest as a whole rose near a three-year high, to over $220M. 

Outside Hyperliquid, traders are more cautious longing PAXG, with only 59% in long positions. The growth in long positions is also more gradual, signaling Hyperliquid as the hottest venue for gold speculation. 

Spot gold on international markets traded near its all-time peak at $4,830.05. PAXG saw increasing interest in trading, showing a premium at $4,841.56. The token is still mostly relying on its Binance pair for the bulk of centralized volumes. Gold-backed tokens are just entering decentralized trading, as crypto networks are switching to traditional assets. 

PAXG also traded at a premium to Tether’s XAUT, which settled at $4,826.23. XAUT is valued at $2.5B in total, with $300M in daily trading. In the past days, PAXG achieved higher daily volumes of over $441M. PAXG tracks the spot gold price closely, with the exception of short-term premiums.

PAXG and gold trading attracts whales

PAXG is still traded as a novelty token. Its overwhelming bullish open interest of 89% depends on the size of positions, rather than the number of traders. 

On Hyperliquid, a total of 18 whales are making bets on PAXG, evenly split between long and short traders. Short positions are receiving small fees from holding onto the unpopular side of the market. Currently, the biggest position for $10.52M was short, holding an unrealized loss of $445K. Long traders are cautious, posting much smaller positions for now. 

Recently, one whale built a notable position on XYZ:silver and XYZ:gold, two of the other tokenized options on Hyperliquid. The whale’s positions hold a small unrealized loss. For now, the tokenized metals are still traded at lower volumes compared to crypto native tokens. The whale’s total positions are for just under $1M. 

The recent inclusion of gold and tokenized stocks on crypto exchanges aims to offset the slower altcoin volumes. The trading also means platforms can continue to draw in high daily fees, even with a general market downturn. Hyperliquid is still in the top 5 fee producers, with $3.41M in revenues for the past day.

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