Tether Gold surges 40% as central bank gold buying ETF inflows boost $800M market cap

Tether Gold (XAUt), a blockchain-backed digital asset tied to physical gold, has experienced a significant surge in demand and market value, driven by a global rush to secure bullion reserves among central banks and institutional investors. By the end of Q2 2025, XAUt’s reserves reached 7.66 tons of gold bullion, supporting over 259,000 tokens and a market capitalization exceeding $800 million [1]. The token’s price has risen 40% in the past year, aligning closely with physical gold prices, which traded near $3,400 per troy ounce [1]. This growth underscores a broader shift toward gold as a safe-haven asset amid economic and geopolitical uncertainties.

Central banks have been pivotal in this bullion boom, purchasing over 1,000 metric tons of gold in 2024—the third consecutive year of record buying. This marks a reversal from decades of net gold sales, reflecting a strategic pivot to mitigate risks associated with currency devaluation and global instability [1]. Analysts highlight the symbolic weight of this trend. “For decades, central banks were net sellers of gold. Now they’re stockpiling it again,” said Christopher Gannatti, global head of research at WisdomTree, noting gold’s role as a “cross-border, regime-agnostic asset” in an era of currency weaponization and rising tensions [1].

Institutional demand has further accelerated gold’s rally. Gold ETFs recorded $38 billion in inflows during the first half of 2025, adding 397.1 metric tons of physical reserves, according to World Gold Council (WGC) data [1]. This momentum is fueled by macroeconomic volatility, including inflationary pressures in the U.S. and geopolitical risks linked to trade policies. Economist Peter Schiff attributes part of gold’s appeal to persistent inflation risks, warning that rising tariffs could drive costs upward for producers and consumers [1].

Tether Gold’s adoption has expanded alongside this demand, with the token now listed on major exchanges like Bybit, Bitfinex, BingX, and KuCoin, as well as Thailand’s Maxbit. Innovations such as an omnichain version on The Open Network (TON) have enhanced its accessibility and utility [1]. By combining gold’s traditional safe-haven properties with blockchain features like divisibility and redeemability, XAUt bridges physical and digital markets, offering a low-overhead alternative to traditional gold investments [1].

The convergence of central bank activity, ETF inflows, and macroeconomic concerns reinforces gold’s enduring role as a hedge against uncertainty. While Bitcoin remains a popular digital alternative, physical gold continues to dominate in systemic risk scenarios, supported by institutional buying and regulatory confidence [1]. Analysts project a bullish outlook for XAUt through 2025, citing regulatory clarity, technological innovations, and the growing integration of traditional assets into blockchain ecosystems [1].

Sources:

[1] [Tether Gold rides bullion boom as central banks, ETFs rush](https://cointelegraph.com/news/tether-gold-xaut-market-cap-gold-rally-2025)

[2] [Latest news on cryptocurrency, blockchain and finances](https://cointelegraph.com/category/latest-news)