How Tether Became the Largest Buyer of Gold – Defying Its Own Crypto Narrative
Tether has quietly overtaken each central financial institution to turn into one of the most aggressive consumers of gold in latest months.
Given Tether’s vocal dedication to the long-term future of crypto, its aggressive shift into gold has left individuals questioning what has prompted the change.
Tether Outbuys Central Banks
Gold’s file 56% surge in 2025 is usually attributed to considerations about fiscal dominance, rising public debt, unfastened financial coverage, and declining belief in main currencies.
These considerations have prompted central banks in nations reminiscent of Kazakhstan, Brazil, and Turkey to increase their gold purchases, thereby reinforcing the steel’s standing as the world’s most trusted safe-haven asset.
A latest Jefferies evaluation, nonetheless, revealed a shocking twist. Tether purchased 26 tonnes of gold in the third quarter — more than any central bank. By the finish of September, the firm’s complete holdings had reached roughly 116 tonnes, valued at roughly $14 billion.
Tether’s presence in the gold market extends far past its tokenized product, XAUt, which holds fewer than 12 tonnes regardless of a $1.6 billion market cap. Jefferies reported that the firm has been increasing its bullion reserves to help each USDT and XAUt.
USDT’s circulation grew from $174 billion in the third quarter to $184 billion by mid-November, in keeping with Reuters. Gold has turn into a bigger half of its backing as provide has elevated. Precious metals now account for about 7% of Tether’s reserves, valued at round $13 billion.
In complete, Tether holds about 104 tonnes of gold for USDT and 12 tonnes for XAUt. The scale and consistency of these purchases underscore its rising affect in the bullion market.
However, the timing of this speedy accumulation has raised a brand new layer of controversy.
A Move at Odds With the GENIUS Act
Tether’s rising bullion place sits awkwardly beside the new US GENIUS Act. The legislation bars any compliant issuer from holding gold as half of its reserves. It pushes corporations in search of approval to depend on money, Treasury payments, or different liquid and clear property.
Tether has already introduced a GENIUS-compliant token called USAT, which is able to keep away from gold completely. Yet, the firm continued so as to add to the bullion backing USDT even after the legislation was handed.
Why Tether doubled down on gold throughout this shift remains to be unclear. Gold costs have additionally cooled since hitting $4,379 in mid-October. The steel now trades greater than 6% under that peak.
Even so, Tether’s dedication to bodily gold highlights a deeper convergence of crypto and conventional safe-haven property.
Different Havens, Different Risks
The convergence between gold and Bitcoin, also known as “digital gold,” isn’t completely shocking. Both appeal to consumers who concern weakening main currencies. Many see finite-supply property as safety towards long-term debasement.
In follow, nonetheless, the two markets behave very in a different way.
Bitcoin has grown quickly over the previous decade however stays extremely unstable. Recent value swings made that clear. The token plunged sharply over the past two months, appearing extra like a high-beta tech asset than a financial hedge.
Stablecoins function on a special promise.
They supply immediate redemption at par and rely on reserves meant to stay stable. Yet the crypto sector continues to point out vulnerability to sudden stress. A speedy shift in sentiment can occur at any time.
If demand for stablecoins had been to break down, strain would fall straight on the property backing them. That consists of Tether’s rising pile of gold. A pointy market reversal might immediate bullion gross sales, drawing a historically regular asset into the turbulence of crypto-driven markets.
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