LIVE MARKETS-Tether: Where crypto and gold collide
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TETHER: WHERE CRYPTO AND GOLD COLLIDE
Gold XAU= is having a barnstorming year, sitting on a 55% gain that puts it on track for its strongest annual rally since 1979.
Central banks, institutional investors and even the Reddit bros have been jumping on the bandwagon that has driven the price well above $4,000 an ounce to record highs. That's in strong contrast to bitcoin BTC=, which is heading for its first yearly decline since 2022.
Crypto and gold might seem like they are worlds apart, but the stablecoin market is one area where the two intersect.
Tether, which runs the world's largest stablecoin, has been a major buyer of gold this year, ramping up its purchases over the third quarter to put it on a par with central banks, according to Jefferies.
Stablecoins are cryptocurrencies pegged to a real-world currency, usually the U.S. dollar. The bank estimates that, as of September 30, Tether held at least 116 tonnes of gold on behalf of customers, worth some $14 billion at current prices.
"This means Tether is the largest holder of gold outside central banks and its holdings are roughly equal to smaller central banks, such as Korea, Hungary, and Greece," Jefferies said.
In addition to its USDt stablecoin, Tether also offers Tether Gold, a token backed by physical gold. Jefferies said they believe that potential supply growth of both mean Tether could remain a significant buyer of gold.
(Amanda Cooper)
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