Tether Gold (XAU₮) has become the gold-backed token with the highest market capitalization.
In fact, less than two months after the official launch, its market capitalization has abundantly exceeded 20 million dollars, whereas all the other tokens anchored to gold do not reach this figure.
Tether states that the reason for this success is due to a strong increase in demand since it offers investors an easy way to own and trade high-quality physical gold within a growing ecosystem of digital assets.
In addition, the spot price of gold has risen sharply since the end of January, revealing an increase in financial demand for the ultimate safe-haven asset. Gold has actually been growing strongly since June of last year, and for now, it seems to be heading for its all-time high of over $1,800 per ounce recorded in August 2011 – currently trading at around $1,600 per ounce.
Tether’s CTO, Paolo Ardoino, said:
“Tether Gold had a great start. But I think this is nothing compared to the potential of this new asset, especially in the context of increased investor interest in risk diversification and capital security against political uncertainty. Tether Gold offers diversification in terms of risk and volatility and I expect it to achieve a market capitalization of at least $100 million”.
Given that in less than two months it has already exceeded $20 million of capitalization, Ardoino’s hypothesis does not seem so far-fetched, although it obviously remains optimistic.
Moreover, in this phase of deep uncertainty in the global financial markets, it is possible that the demand for physical gold investments may grow further, thus also favouring the increase in demand for XAU₮.
In the meantime, Tether, which also manages the main stablecoin pegged to the US dollar (USDT), has announced that today 200 million USDT tokens will be swapped from Omni to ERC-20, but that Tether’s total supply will not change.
This is a further step in the USDT migration process from Omni to Ethereum, and other blockchains.