Tether Gold (XAUt), the gold-backed stablecoin, has surged in prominence as central banks and institutional investors intensify their accumulation of physical bullion amid macroeconomic and geopolitical uncertainties. By the second quarter of 2025, Tether Gold’s reserves had grown to 7.66 tons of fine troy ounces, supporting over 259,000 tokens in circulation and a market capitalization exceeding $800 million [1]. The token, which launched in 2020, maintains a 1:1 peg to gold’s spot price, currently trading near $3,400 per troy ounce. Over the past year, XAUt’s value has risen 40%, aligning with gold’s performance as demand for the safe-haven asset accelerates [1].
Central banks have played a pivotal role in this bullion boom, adding over 1,000 metric tons of gold in 2024 alone, marking the third consecutive year of record accumulation. The World Gold Council (WGC) noted that most central bankers anticipate further growth in bullion reserves over the next 12 months [1]. This shift contrasts with historical trends, as central banks were previously net sellers of gold for decades. Analysts attribute the reversal to rising geopolitical tensions, currency instability, and the “weaponization” of currencies, which has elevated gold’s role as a cross-border asset [1].
Institutional demand has also spiked through gold ETFs, which saw $38 billion in inflows during the first half of 2025, increasing holdings by 397.1 metric tons. This momentum follows a five-year peak in ETF demand, driven by fears of economic instability from trade wars, inflation, and potential recessions [1]. Tether Gold’s tokenized structure offers institutional investors a hybrid solution, combining the liquidity and accessibility of blockchain with the intrinsic value of physical gold. The asset is now listed on major exchanges like Bybit, Bitfinex, and Maxbit in Thailand, with Tether’s USDT0 liquidity network recently expanding XAUt to The Open Network (TON) [1].
Experts highlight macroeconomic factors as the core drivers of gold’s appeal. Rising inflation, exacerbated by U.S. trade policies and Fed rate uncertainty, has prompted a cautious stance on monetary policy. Morningstar’s Preston Caldwell noted delayed expectations for rate cuts due to inflationary pressures, while economist Peter Schiff emphasized gold’s hedge against currency devaluation [1]. Tether’s integration of physical gold reserves into blockchain networks has also streamlined institutional access, reducing barriers to entry for large-scale investors [1].
However, the rapid accumulation of gold by central banks and ETFs raises questions about market liquidity and pricing dynamics. While digital tokens like XAUt enhance transparency and real-time tracking of gold-backed assets, regulators are monitoring the sector to prevent destabilization of traditional bullion markets. Tether’s ability to maintain its 1:1 peg while scaling to meet demand will be critical to XAUt’s long-term viability. For now, the asset reflects a broader convergence of traditional and digital finance, offering investors a dual-layer strategy in an era of volatility [1].
Source: [1] [Tether Gold (XAUt) Market Cap, Gold Rally 2025] [https://cointelegraph.com/news/tether-gold-xaut-market-cap-gold-rally-2025?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound]
