In a significant development, Tether, the issuer of the largest stablecoin, USDT, has announced a $100 million investment in Elemental Altus Royalties. This move elevates Tether’s ownership stake in the Canadian gold royalty company to a commanding position following an earlier acquisition of a 37.8% interest for $105 million in June. This strategic investment aligns with Elemental’s recent merger with EMX Royalty, resulting in the formation of a mid-tier gold-focused royalty company boasting 16 producing royalties.
The investment comes at a time when gold prices have surged to record levels, nearing $3,580 per ounce. Tether’s CEO, Paolo Ardoino, referred to gold as the “natural Bitcoin,” indicating a dual-strategy of blending cryptocurrency with tangible assets. This pivot raises intriguing questions about whether Tether’s approach might inspire other stablecoin issuers to explore investments in royalty companies, thereby diversifying their revenue streams beyond the crypto market.
The comparisons between gold and Bitcoin are often drawn, with Bitcoin hailed as “digital gold” due to its scarcity and perceived value as a hedge against inflation. However, Bitcoin’s volatility and debated intrinsic value contrast sharply with gold’s historical stability and universal acceptance. While cryptocurrency treasury strategies employed by firms like Michael Saylor’s Strategy and BitMine Immersion Technologies focus heavily on crypto assets, they often face skepticism from traditional investors who view gold as a steadfast investment.
Tether’s investment in gold royalties appears to strategically sidestep these complex debates, presenting exposure to a widely recognized asset while utilizing blockchain efficiencies. This move may resonate well with investors seeking stability amid growing regulatory scrutiny.
Tether’s bold initiative could be seen as a stand-alone effort influenced by its robust financial success over recent years, including a $13 billion profit in 2024 and $5.7 billion in the first half of 2025. Other stablecoin issuers like Circle Internet Group’s USDC or Ripple’s RLUSD, facing tighter profit margins and regulatory hurdles, may be less inclined to follow suit. Circle’s model is focused on maintaining fiat-backed reserves, while Ripple emphasizes blockchain payment solutions.
Tether’s approach could potentially spark a trend where stablecoin issuers seek to combine the liquidity of cryptocurrency with the stability of gold. This could lead to such companies targeting established royalty stock firms like Franco-Nevada, Wheaton Precious Metals, or Royal Gold, thereby creating an attractive avenue for diversification.
While Tether’s new strategy presents myriad advantages, including enhanced stability through diversification and steady cash flows from gold royalties, challenges abound. Fluctuations in gold prices, while generally less volatile than cryptocurrencies, still pose risks. Additionally, increased regulatory scrutiny may follow, especially given Tether’s history with transparency issues. The operational risks associated with Elemental’s mining partners also present indirect challenges.
Should Tether’s investment prove successful, it might redefine the landscape of stablecoin backing. Conversely, any setbacks could isolate Tether from its peers, leaving it as an outlier in the industry. The intersection of cryptocurrency and gold holds significant promise, but its future effectiveness will largely depend on the execution of Tether’s strategy and market acceptance of this hybrid model.
