Diversified Gold Investment Strategy for Crypto Traders

In my view, the main risk with tokenized gold assets like PAXG stems from a potential global catastrophic event that could disable the entire internet, including banking systems where physical gold is stored or traded. Although there are rumors that Elon Musk has deployed some servers to orbit, which could preserve access, this scenario remains highly unlikely. In such extreme circumstances, PAXG might actually be a better option because it is digital and could be accessed differently.

Regulatory risks for both physical gold and PAXG are similar, with potential for scam or regulatory intervention that could render the tokenized gold worthless. For example, a government or authority might revoke or restrict access to these digital assets, just as they might with physical gold holdings.

On the other hand, physical gold stored in a safe or divided into small denominations for peer-to-peer trading represents a more resilient backup in catastrophic scenarios, especially when the internet is down. Physical gold's tangibility and decentralization provide a level of security that digital tokens cannot fully match in a post-disaster context.

Therefore, to be well-prepared, I believe holding both forms of gold makes sense. A balanced approach might be allocating around 60% of your gold holdings into tokenized gold like PAXG for ease of trading and portability, and about 40% in small, physical gold stored securely at home to ensure access when digital systems fail. This diversified strategy could offer a better safeguard against various risks associated with both digital and physical assets.