Tether Gold Market Cap Soars Amid Record Gold Prices
A turbulent macroeconomic environment has fueled a surge in gold demand from institutional investors and central banks, pushing gold bullion to record highs in 2025. This trend has significantly impacted Tether Gold (XAUt), a digital token backed by physical gold.
Tether Gold's Impressive Growth
By the end of the second quarter, Tether Gold (XAUt) held 7.66 tons of fine troy ounces of gold, as verified by BDO Italia in their latest attestation report. This reserve supports over 259,000 XAUt tokens in circulation, resulting in a market capitalization exceeding $800 million.
XAUt's price closely mirrors the market value of physical gold, which is trading near $3,400 per troy ounce. Tether Gold brings the benefits of gold to the blockchain, offering portability, divisibility, and redeemability, similar to Bitcoin (BTC).
Over the past year, XAUt's price has increased by 40%, matching the performance of spot gold, according to Bloomberg data.
XAUt Availability and Expansion
Launched in January 2020, Tether Gold is available on major crypto exchanges such as Bybit, Bitfinex, BingX, and KuCoin. Recently, XAUt expanded its presence to Thailand through the Maxbit cryptocurrency exchange.
Additionally, Tether's liquidity network, USDT0, has introduced an omnichain version of XAUt on The Open Network (TON).
Factors Driving Gold Demand
While Bitcoin is often touted as “digital gold,” physical gold remains a safe-haven asset during uncertain times.
The World Gold Council (WGC) reports that global central banks accumulated over 1,000 metric tons of gold in 2024, marking the third consecutive year exceeding this milestone. Most central bankers expect bullion reserves to continue rising.
Christopher Gannatti, global head of research at WisdomTree, noted, “For decades, central banks were net sellers of gold. Now they’re stockpiling it again. In a world of rising geopolitical risk and currency weaponization, gold is one of the few assets that travels well across borders and regimes.”
Institutional Investor Interest
Institutional investors have also increased their investments in gold exchange-traded funds (ETFs). The first half of 2025 saw the largest gold ETF inflows in five years, with $38 billion in inflows and a collective increase of 397.1 metric tons of physical bullion, according to WGC data.
Economic and Geopolitical Concerns
Escalating geopolitical and economic concerns, including trade tensions, have amplified fears of economic instability and potential recession.
Inflation Risks
Economist Peter Schiff has highlighted persistent inflation risks as a key driver of gold’s appeal. Inflationary pressures have resurfaced in the United States, with the Federal Reserve anticipating further price increases due to tariffs.
Morningstar’s senior US economist, Preston Caldwell, has delayed expectations of rate cuts in response to these inflationary trends.
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