Tether Invests in Gold Mining to Bolster USDT Stability
Tether is stepping up its expansion into the gold sector, exploring gold mining investments across mining, refining and royalty companies. The Tether gold mining push aims to deepen the stablecoin issuer’s commodity exposure and diversify USDT’s backing.
Since launching tokenized gold Tether Gold (XAUt) in 2020, Tether has backed 259,000 XAUt tokens with 7.7 tonnes of bullion and holds about $8.7 billion in physical gold reserves. CEO Paolo Ardoino calls gold a “natural counterpart to bitcoin.”
In H1 2024 Tether reported $5.7 billion in profits and a market cap of $168 billion. Its XAUt market cap also jumped past $1.3 billion after a single-day $437 million mint in August. Recently, Tether Investments bought a $105 million stake in gold royalty firm Elemental Altus, injected a further $100 million post-merger with EMX, and has held talks with BVI-based Terranova Resources.
By deploying crypto profits into the metals market, the Tether gold mining strategy enhances USDT stability and signals bullish momentum for Tether’s commodity-backed offerings, potentially strengthening trader confidence in stablecoin collateralization.
Bullish
The expansion into gold mining and related commodities strengthens USDT’s collateral base, reducing dependency on traditional assets. In the short term, increased gold reserves and high-profile investments can boost market confidence, potentially driving up demand for USDT. Over the long term, diversified backing with real-world assets like gold should enhance stability, lower redemption risks and attract more institutional adoption. Historical precedents show that commodity-backed stablecoins receive positive trader reactions, reinforcing a bullish outlook for USDT.