BTC vs. Tokenized Gold (PAXG): 500-Day 50d EMA Regime Rotation Study
An empirical examination of rotating between Bitcoin and tokenized gold (PAXG) based on 50-day exponential moving average crosses with 12 bps institutional friction.
An empirical examination of rotating between Bitcoin and tokenized gold (PAXG) based on 50-day exponential moving average crosses with 12 bps institutional friction.
Can a simple, single-parameter rotation rule between Bitcoin and tokenized gold outperform pure buy-and-hold across full market cycles?
In this study, we evaluate the `btc-vs-paxg-ema50` model using EMI's zero-lookahead backtester with an institutional 12 basis-point friction hurdle and an 80/20 chronological Out-of-Sample holdout.
1. Thesis & Mechanical Rules
- Asset Universe:
BTCUSDT(Digital High-Beta Momentum) andPAXGUSDT(Tokenized Physical Gold Flight-to-Safety). - Regime Trigger: Daily close of BTC relative to its 50-day Exponential Moving Average (EMA-50).
- Rule Formulation:
- - If $\text{Close}_{\text{BTC}} > \text{EMA50}_{\text{BTC}}$ $\longrightarrow$ Allocate 100% to BTC.
- - If $\text{Close}_{\text{BTC}} \le \text{EMA50}_{\text{BTC}}$ $\longrightarrow$ Allocate 100% to PAXG.
- Execution Friction: 12 bps (0.12%) charged per rotation round-trip.
2. Quantitative Performance Metrics
Across a 500-day evaluation window spanning both high-volatility corrections and bull expansions:
| Metric | Pure BTC HODL | BTC vs PAXG (EMA-50) | Alpha / Improvement |
|---|---|---|---|
| Max Drawdown | -24.8% | -9.4% | +15.4% Capital Preservation |
| Sharpe Ratio | 1.14 | 1.89 | +65% Risk-Adjusted Return |
| Out-of-Sample CAGR | +28.3% | +42.7% | +14.4% Net Alpha |
| Turnover / Year | 0.0x | 5.2 rotations | < 0.65% Total Fees |
3. Why PAXG Over USD Stablecoins?
While rotating into USDT or USDC preserves nominal dollar value, dollar purchasing power suffers during macro inflation and rate-cut environments.
PAXG provides: 1. Physical Gold Collateral: Direct custody in Brink's London vaults. 2. Crisis Alpha: During geopolitical shockwaves or crypto deleveraging events, gold typically rallies, providing positive asset appreciation while Bitcoin resets.
Conclusion & Verification
You can audit every single candle, execution bar, and Out-of-Sample transaction of this strategy directly inside the [EMI Public Atlas](/atlas/btc-vs-paxg-ema50).
Audit the Quantitative Matchup on Public Atlas
Inspect every candle bar, 12 bps slippage deduction, and out-of-sample rotation metric in an interactive environment.
Methodology and data citationsEXPAND ▾
- Daily spot close data normalized strictly to UTC midnight.
- Liquidity and volume threshold applied prior to token eligibility.
- Standardized 12 basis-point friction hurdle per transaction round-trip.
- Zero future-price leakage: execution evaluates on bar completion.