Gold Token PAXG rises and breaks through the bears, with the largest on-chain short position showing an unrealized loss of $477,000

According to the latest monitoring data, the trader known as the “Largest On-Chain Gold Short” is experiencing a loss. This trader shorted 2,989.3 PAXG tokens (approximately $14.02 million) with 5x leverage, with an average entry price of $4,533. Currently, the unrealized loss per token has reached $47,700. Interestingly, this loss reflects that gold tokenized assets are becoming a market focus, and that there is fierce opposition between bullish and bearish sides.

Why Short Sellers Are in Trouble

Gold’s continuous rise breaks the bearish expectations

The current PAXG price is $4,696.35, up 3.6% from the average entry price of $4,533. This seemingly small increase, under 5x leverage, directly translates into an unrealized loss of $47,700. More notably, PAXG has shown a clear upward trend recently: up 1.95% over 7 days, up 7.89% over 30 days.

This short seller clearly underestimated the upward momentum of gold. According to relevant information, factors such as Iran’s full-scale war and Trump’s tariff policies are boosting gold demand, and market risk aversion toward gold has significantly increased. In this macro context, shorting gold is essentially going against the trend.

Leverage amplifies losses

The 5x leverage is the tool chosen by this trader, but it also acts as an amplifier of losses. Taking PAXG as an example, a position of $14.02 million requires only about $2.8 million in capital. This means that even a 3.6% price fluctuation can result in an unrealized loss of $47,700. For high-leverage traders, this is a harsh reality.

Intense confrontation between market opposites

Wealth transfer between bulls and bears

Interestingly, there is an opposite role in this market. According to relevant information, the “Largest On-Chain Gold Long” trader also used 5x leverage to go long 1,500 PAXG tokens, with an average entry price of $4,415.46, currently showing a unrealized profit of $400,000. Both traders use the same leverage multiple, but in opposite directions, resulting in vastly different outcomes.

This is not just a confrontation between two traders but also reflects differing market judgments on gold’s prospects. The longs see safe-haven demand and long-term value, while the shorts are betting on a gold correction. Based on current results, the market has voted with prices in favor of the longs.

Gold tokenization becomes a mainstream trading product

As a gold token, PAXG has become an important RWA (Real-World Asset Tokenization) product in the crypto market. Its current market cap is $180 million, ranking 44th, with over $150 million in 24-hour trading volume. This indicates that gold tokenization is no longer a niche product but is gradually becoming a mainstream trading asset.

The other side of unrealized gains

It is worth noting that this trader’s total unrealized profit is $1.245 million. Although the short position in PAXG shows an unrealized loss of $47,700, by shorting BTC and a basket of altcoins, this address remains overall profitable. This suggests that the trader is not entirely bearish but is engaging in more complex hedging strategies.

However, this also exposes a problem: in a bullish market for gold and crypto assets, short strategies face overall pressure.

Summary

The $47,700 unrealized loss of this “Largest On-Chain Gold Short” essentially reflects the market’s consensus on gold’s upward trend. Macro factors such as Iran’s war and Trump’s tariffs are driving gold demand, and the maturity of gold tokenization allows more funds to participate conveniently. In such a market environment, 5x leverage acts as a risk amplifier rather than a profit tool. For traders, this case serves as a reminder: in a trending market, shorting against the trend involves greater risks.