Tether acquired 26 tons of gold in Q3, outpacing any single central bank & equating to 2% of global demand.
The second wave of gold’s 2025’s rally-from $3,000 in August to $4,379 in October- perfectly mirrored the timing of Tether’s accelerated buying.
IS GOLD’S HISTORIC BULL RUN BEING FUELED BY A CRYPTOCURRENCY’S GOLD BULLIN PURCHASES??
In the volatile world of cryptocurrencies (as evidenced with the drastic sell off last week), Tether stands out as a pillar of relative stability.
As the issuer of USDT-the world’s largest stablecoin by market cap- Tether has long been scrutinized for its reserve practices. But since 2020, the company has quietly pivoted toward gold, transforming from a digital-dollar purist into a major player in the physical bullion market.
This shift, marked by aggressive purchases of gold to back both its USDT reserves and the dedicated Tether Gold (XAUT) token, has coincided with a dramatic surge in gold prices.
From a pandemic-low of around $1,500 per ounce in March 2020 to a record high of $4,379 in October 2025, gold’s value has more than doubled. (lbank.com)
Has Tether’s accumulation been a catalyst for this rally, or is it merely riding the wave of Central Banks & investors dumping the dollar, & flocking to hard assets?
We examined the timeline of Tether’s gold strategy, its scale relative to global demand, & the evidence linking these buys to price movements.
The Dawn of Tether Gold: A Modest Start in 2020
Tether’s foray into gold began modestly with the January 2020 launch of XAUT, a blockchain-based token pegged 1:1 to one troy ounce of physical gold stored in Swiss vaults under London Bullion Market Association (LBMA) standards. Each XAUT represents ownership of a specific gold bar, offering the divisibility and portability of crypto alongside gold’s timeless appeal as an inflation hedge.
Early adoption was small: By mid-2020, XAUT’s market cap hovered below $100 million, backed by just a few tons of gold, as the world grappled with COVID-19 lockdowns & unprecedented monetary stimulus. At the time, gold prices were rebounding from a brief dip.
The metal bottomed at $1,451 per ounce in March 2020 amid initial market panic, then rocketed 27% to $1,847 by August, driven by central bank buying (led by China and Russia) and fears of currency debasement.
Tether’s initial XAUT issuance—estimated at under 1 ton—barely registered against global gold demand of about 4,600 tons annually, per World Gold Council data. Analysts at the time viewed it as a novelty: a crypto twist on gold ETFs, not a market mover.
Yet, this launch laid the groundwork for Tether’s deeper integration of bullion into its reserves, signaling a hedge against the regulatory and financial risks plaguing stablecoins.
From Token to Treasury: Scaling Up Reserves (2021–2023)
As USDT’s circulation exploded—from $20 billion in early 2021 to over $80 billion by late 2022—Tether began allocating a fraction of its profits to “long-term value positions,” including gold.
Tether could see the writing on the wall for its ability to influence the Bitcoin market, & decided to begin transferring crypto profits into an actual store of REAL value: GOLD.
With gold prices up 125% since 2021, this has turned out to be an excellent decision. This wasn’t just for XAUT; gold increasingly started appearing in USDT’s backing mix, diversifying away from the company’s heavy reliance on U.S. Treasuries (which peaked at over 80% of reserves).
Gold prices during this period were choppy. After hitting $2,070 in August 2020, the metal retreated to $1,684 by March 2022 amid rising interest rates and a strengthening dollar, then rebounded to $2,043 by year-end as geopolitical tensions from Russia’s invasion of Ukraine fueled safe-haven demand.
Tether’s gold holdings grew steadily but opaquely—quarterly reports from BDO showed gold as a minor asset (under 1% of reserves in 2021), but cumulative purchases likely added 5–10 tons by 2023, including XAUT’s expansion to around 5 tons backing a $1 billion market cap.
The impact was subtle. Tether’s buys, while growing, represented less than 0.2% of annual global mine production (3,600 tons in 2022). Central banks dominated the narrative, netting 1,082 tons in 2022 alone—the highest since 1967.
Still, Tether’s entry diversified demand sources, subtly tightening supply in over-the-counter (OTC) markets where large buyers like stablecoin issuers operate discreetly.
Acceleration in 2024–2025: The Bullion Boom Tether’s gold strategy went into overdrive in 2024, as CEO Paolo Ardoino publicly touted bullion as a “safe asset” amid darkening global geopolitics.
By year-end, reserves hit $5.3 billion (roughly 25–30 tons at prevailing prices), comprising about 3–4% of total assets. This included stakes in gold royalty firms like Elemental Altus (where Tether owns nearly a third) and over $300 million in streaming companies, securing future production without direct mining risks.
The real surge came in 2025. Gold prices have exploded, up nearly 60% year-to-date, shattering records amid U.S. tariff threats, dollar weakness, and central bank hoarding (1,100+ tons net buys).
Tether added 80 tons by mid-year, pushing total holdings to 116 tons ($12.9 billion) by Q3—rivaling central banks like Australia or Greece & ranking in the global top 30.
Q3 alone saw 26 tons acquired, outpacing any single central bank that quarter and equating to 2% of global demand.
To visualize this alignment, consider the following chart of average monthly gold prices (USD per ounce) from January 2020 to November 2025, overlaid with key Tether gold reserve milestones (in tons, scaled for comparison).
Data sourced from historical records shows the second wave of 2025’s rally—from $3,000 in August to $4,379 in October—mirroring Tether’s accelerated buying.
This correlation intensified post-August 2025, when Tether’s Q3 spree aligned with a $1,000/oz spike unexplained by dollar moves alone.
Measuring the Impact: Catalyst or Coincidence?
Tether’s buys haven’t single-handedly driven gold’s ascent—central banks remain the “elephants in the room,” with 440 tons purchased in H2 2025 alone.
Yet, evidence suggests an outsized marginal effect: Supply Tightening.
Tether’s 26 tons in Q3 equaled 12% of known central bank buys, contributing to a 2% slice of total demand. In OTC markets, where 70% of gold trades occur, such volumes can squeeze premiums and bid up spot prices.
Sentiment Boost: Jefferies analysts link Tether’s “rapid pick-up” to the rally’s second leg, noting it exceeded central bank flows over two quarters. (reuters.com)
OKX research attributes 2025’s 50% price rise partly to Tether’s acquisitions, enhancing bullish investor psychology. (okx.com)
There’s no way to know exactly how much Tether’s gold acquisitions influenced gold’s explosive Q3 rally, but without Tether, gold’s peak might have topped out at $3,800–$4,000.
Quantifying the Lift: If Tether’s 91 tons added in 2025 (from 25 to 116) represented 2.5% of global supply, it could have amplified upward pressure by 5–10%.
Tether’s holdings, while massive for a private entity, are dwarfed by giants like the IMF (2,814 tons).
While total holdings are dwarfed by giants like the IMF & global central banks- there is one word that might explain an outsized impact by Tether’s gold purchases: REHYPOTHECATION.
Tether is acquiring PHYSICAL GOLD BULLION to back XAUT 1:1. Tether is almost certainly not engaging in paper rehypothecation gold games like the bullion banks engage in.
This means that every ounce of physical gold that Tether acquires removes 100-200 oz of “gold” off global markets as rehypothecation trades are unwound. This results in an EXPONENTIAL effect in gold spot prices as ACTUAL PHYSICAL METAL is being removed from the global market by Tether acquisitions.
A potential COMPLETE Game Changer.
Conclusion: A New Pillar in Gold’s Edifice?
Since 2020, Tether’s gold purchases have evolved from a tokenized experiment to a strategic hoard rivaling sovereign reserves, injecting fresh demand into arguably the world’s most important market.
While Tether was not the sole driver of gold’s 180%+ surge, it’s 2025 acceleration—adding over 90 tons—tightened supply and fueled sentiment, contributing meaningfully to the metal’s record run.
As stablecoins bridge fiat and crypto, Tether’s “borderless central bank” vision underscores gold’s enduring role in digital finance.
Investors eyeing bullion should watch Tether’s next moves: In a world of fiat uncertainty, this crypto-gold nexus could help drive the next leg of the gold rally.
