The largest stablecoin issuer in the world, Tether, is set to expand its investment portfolio by venturing into gold mining. This strategic move aims to leverage profits from the cryptocurrency market to make investments across various segments of the gold supply chain—spanning mining, refining, trading, and even royalty companies. The decision comes at a time when gold prices are soaring.
With an impressive reserve of $8.7 billion in gold bars stored in a Zurich vault, Tether is poised to deepen its involvement in the gold industry. According to a report by the Financial Times on September 5, Tether CEO Paolo Ardoino articulated a compelling perspective, stating that gold serves as a “natural Bitcoin,” emphasizing his belief that while Bitcoin is often referred to as “digital gold,” gold itself is the foundation of natural wealth.
The gold mining sector has received Tether’s foray into gold positively, although some industry insiders have expressed skepticism regarding the company’s strategic approach. Critics are concerned that Tether’s entry into the gold investment arena lacks a clear vision. Nevertheless, Ardoino remains optimistic and an ardent supporter of gold, suggesting it could serve as a valuable complement to Bitcoin.
Earlier this year, Tether Investments SA demonstrated its commitment to the gold sector by investing $105 million in Elemental Altus, a gold royalty company, acquiring a minority stake. Following this, Tether Investments injected another $100 million into the company as it merged with EMX to form Elemental Royalty Corp, signaling further consolidation in their gold-focused ambitions.
As Tether moves ahead with its gold investment strategy, the crypto token Tether Gold (XAUT), which is backed by physical gold, has seen significant gains, even as the broader cryptocurrency market faces downward pressure. Over the last two weeks, the market cap for XAUT surged to surpass $877 million, with its price rising above $3,500—a more than 5% increase in just a week. This uptick in XAUT coincides with gold prices reaching a new all-time high above $3,600 per ounce.
Market analysts, including those from Goldman Sachs, have predicted a potential rally in gold prices, forecasting that they could reach as high as $5,000 amid recent economic volatility and rising U.S. Treasury yields, which recently hit 5%. Concurrently, the correlation between gold and Bitcoin appears to be weakening, as investors seem increasingly inclined to favor gold in the current uncertain market climate. Moreover, predictions from Matrixport indicate a higher target for gold prices, suggesting they could reach $4,000 in light of the ongoing volatility and expected Federal Reserve rate cuts.
