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Tether’s tokenized gold product, Tether Gold (XAUt), surpassed $3.3 billion in market capitalization in the first quarter as gold reserves rose to 154 tons, supported by increased investor demand amid geopolitical tensions and shifting expectations for Federal Reserve policy.
In its latest report, Tether said XAUt’s market capitalization exceeded $3.3 billion during the first quarter, representing a 36% increase over the period.
The company reported that 707,741 XAUT tokens were in circulation at the end of the quarter. Each token is backed by one troy ounce of physical gold held in reserve.
Tether attributed the growth to a broader “flight to hard assets,” as investors sought exposure to bullion amid geopolitical tensions and changing monetary conditions.
The expansion also occurred during a volatile period for gold. Prices rose early in the year as investors shifted toward safe-haven assets, influenced by geopolitical tensions and expectations that the Federal Reserve would begin cutting interest rates.
Gold later pulled back when rate-cut expectations faded and the US dollar strengthened, which reduced bullion demand. Some investors also took profits after an earlier rally in which prices briefly peaked above $5,500 per troy ounce. At the time of reporting, gold was trading at around $4,500 per troy ounce.
Year to date, XAUT’s US dollar price is up 4.37%, according to Yahoo Finance data.
XAUT accounts for more than half of the tokenized gold market and has expanded by roughly $1.1 billion since the start of the year.
Its closest competitor, PAX Gold (PAXG), issued by Paxos, has a market capitalization of nearly $2.2 billion and is supervised by the New York State Department of Financial Services (NYDFS).
The growth in tokenized gold reflects rising demand for tokenized commodities, with investors seeking exposure to physical assets without managing storage or logistics.
Tokenized products also enable gold to be traded around the clock and transferred globally—capabilities that are not available in traditional bullion markets.
Industry data cited in the report places tokenized real-world assets at nearly $31 billion in value.
The crypto bear market remained in force on Wednesday, with bitcoin slipping back toward the $60,000 area. Sharp pullbacks in gold and oil also weighed on the 2025 “debasement trade,” which had supported hard assets amid concerns about government debt and fiat currencies. Meanwhile, tech—particularly the AI boom—continued…
