Tether Gold (XAUt) Gains 40% as Central Banks ETFs Boost $800M Market Cap

Tether Gold (XAUt) has surged in prominence as global demand for physical gold accelerates, driven by central banks and institutional investors navigating macroeconomic and geopolitical uncertainties. By the end of Q2 2025, XAUt’s reserves had grown to 7.66 tons of fine troy ounces, backing over 259,000 tokens in circulation and a market capitalization exceeding $800 million [1]. The token’s price, pegged to physical gold’s value of approximately $3,400 per troy ounce, has risen 40% over the past 12 months, mirroring gold’s performance [1]. This aligns with a broader bullion rally, as central banks and exchange-traded funds (ETFs) continue to prioritize gold as a safe-haven asset.

Central banks added over 1,000 metric tons of gold in 2024, marking three consecutive years of net purchases, a shift from decades of net sales [1]. The World Gold Council (WGC) reported that gold ETFs attracted $38 billion in inflows during the first half of 2025, increasing holdings by 397.1 metric tons—five-year highs [1]. Analysts attribute this trend to inflationary pressures, geopolitical tensions, and the potential economic fallout from US President Donald Trump’s trade policies. The Federal Reserve has signaled that tariffs could drive costs upward, intensifying concerns about price stability [1]. Christopher Gannatti, global head of research at WisdomTree, noted that gold’s cross-border utility makes it a strategic reserve asset amid currency volatility and geopolitical risks [1].

Tether’s tokenized gold offering has expanded its footprint, listing on major exchanges like Bybit, Bitfinex, and KuCoin. Recent additions include the Thai exchange Maxbit and an omnichain version on The Open Network (TON) [1]. While Bitcoin is often dubbed "digital gold," physical bullion remains the preferred asset during crises, according to the article. Economists like Peter Schiff emphasize gold’s role as an inflation hedge, with Morningstar’s Preston Caldwell citing delayed expectations for rate cuts due to persistent price pressures [1].

The convergence of traditional and digital markets highlights gold’s evolving role in portfolio diversification. XAUt’s blockchain-based structure provides the liquidity and divisibility of digital assets while retaining the intrinsic value of physical bullion [1]. As central banks and institutional investors continue to bolster gold reserves, tokenized solutions like XAUt may bridge conventional and decentralized finance, catering to markets seeking both security and innovation [1].

Source: [1] [Tether Gold Market Cap Growth] [https://cointelegraph.com/news/tether-gold-xaut-market-cap-gold-rally-2025]