Tether Becomes the Largest Holder of Gold Outside Central Banks – A Theory Emerges

Tether, the cryptocurrency sector’s largest stablecoin issuer, has become a giant in the gold market in a move that has surprised the markets in recent months.

Tether has become the world’s largest gold holder excluding central banks, according to new analysis from Jefferies. This has reignited discussions that it may have played a significant role in gold’s recent surge to all-time highs.

Jefferies: “Tether Raises Gold”

After gold prices hit a record high about a month ago, many commentators attributed the surge to concerns about “currency depreciation,” while others argued it was due to dollar flight and momentum. However, according to Jefferies, the picture may be much simpler: Tether drove gold higher.

Tether’s interest in gold isn’t new. Since 2020, the company has been issuing the XAUt token, backed by physical gold held in Swiss vaults, and has invested over $300 million in mining and precious metals companies throughout the year. CEO Paolo Ardoino has frequently stated that they are seeking to diversify their holdings, describing gold as a “natural bitcoin.”

According to data published by Jefferies, Tether’s 116 tonnes of gold reported in its end-September reserves puts the company just behind central banks. This amount is on par with the gold reserves of small- to medium-sized central banks like South Korea, Hungary, and Greece.

According to the report, Tether alone accounted for about 2% of global gold demand, equivalent to 12% of central banks’ quarterly gold purchases.

Based on conversations with investors, Jefferies reports that Tether plans to purchase approximately 100 tons of gold in 2025. While stablecoin demand remains strong despite volatility in the crypto market, Tether has the financial strength to easily fund these purchases, in line with its target of $15 billion in profit this year.

Tether’s gold accumulation strategy conflicts with the US Genius Act, which prohibits stablecoin issuers from using gold as a reserve asset. Therefore, Tether’s massive gold holdings cannot be used to provide reserves for its compatible stablecoin, USAT, which is scheduled to be launched by the end of the year.

*This is not investment advice.

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