The debate between Bitcoin and gold has long centered on which asset serves as the superior store of value. Gold has been a reserve asset for centuries, trusted for its stability, while Bitcoin, often referred to as “digital gold,” is still in its early stages of adoption. But rather than comparing them in isolation, what if Bitcoin’s value was measured in terms of gold rather than fiat?
Dr. Mark Richardson, Project Lead at Bancor and Carbon DeFi, introduced this concept by analyzing the BTC/XAU (Bitcoin to Gold) chart on a recent Blockchain Banter, revealing a fresh perspective on Bitcoin’s true valuation. He pointed out that while Bitcoin’s price in USD recently hit an all-time high, its rally could have been somewhat exaggerated in fiat terms due to inflationary pressures, whereas its valuation in gold remained more stable and methodical. In fact, Bitcoin’s price in gold had barely exceeded its 2021 peak, indicating that much of its recent rise may be more a function of a weakening dollar rather than Bitcoin’s inherent strength.
This alternative valuation method led to a discussion on potential trading opportunities. If Bitcoin is expected to range for a while, could traders capitalize on its movements against gold?
Mark ran a backtest using Carbon DeFi’s simulator, and by using real historic data, showed how an automated recurring strategy between Bitcoin and Pax Gold could yield strong returns.
The results demonstrated that over a several-month period, such a strategy could generate an approximate 25% ROI in gold, reinforcing the idea that alternative trading pairs beyond fiat could present profitable opportunities.
This concept isn’t just theoretical — Carbon DeFi enables traders to automate and optimize these strategies in a way that centralized exchanges (CEXs) and other decentralized exchange (DEX) platforms cannot.
What Are Automated Recurring Orders?
Automated Recurring Orders are a novel strategy type on Carbon DeFi that allow users to create linked limit orders. These orders continuously trade back and forth between two assets — automatically compounding profits without requiring manual intervention.
In the context of Bitcoin and gold, a trader could set up an order to buy Bitcoin with gold (PAXG) at one price and sell Bitcoin for gold at another price, effectively automating range trading between the two. When one order fills, the acquired tokens automatically fund the opposing order, creating a recurring trading cycle that captures price fluctuations without the need for constant manual intervention.
In Mark’s demonstration, his TBTC/PAXG strategy was created using two range orders, set to:
Buy TBTC: 24.41–26.63 PAXG per TBTC
Sell TBTC: 28.03–29.32 PAXG per TBTC
Funding: 1 PAXG (Only the buy order was funded; both sides are not required to be funded.)
Carbon DeFi’s Automated Recurring Orders ensure that once set up, the strategy- so long as the pair continues trading within the range- runs indefinitely until the user modifies or withdraws it.
Additionally, trades on Carbon DeFi execute exactly at the price set by the maker, with zero slippage, no network or trading fees on filled orders, and with liquidity sourced from all major DEXes on a network. The Arb Fast Lane, Bancor’s built-in solver system for Carbon DeFi, further enhances execution by optimizing trades against chain-wide liquidity, ensuring maximum efficiency for makers and takers alike.
By leveraging these automated strategies, traders can optimize their exposure to both Bitcoin and gold, capturing market movements efficiently while avoiding the manual effort required on other trading platforms.
For those looking to trade unique pairs, such as TBTC/PAXG, Carbon DeFi makes it not just possible, but actionable.
For more trading insights, see the full Blockchain Banter below.
https://x.com/Bancor/status/1902013946317639791
Blockchain Banter
Blockchain Banter is a live, unscripted discussion series where industry experts, builders, and thought leaders come together to share knowledge, challenge ideas, and explore trading, DeFi, and blockchain- brought to you by Bancor.
🎙️ Follow me on X at x.com/Here2DeFi and tune in weekly:
Tuesday Trading at 3PM UTC with Mark Richardson | Bancor and Keith Alan | Material Indicators
Wednesday Debates at 3PM UTC
