Wall Street strategist Tom Lee suggested a correlation on Monday between the rise in Tether’s (CRYPTO: USDT) supply and the steady rise in gold prices observed over the past three months.
Crypto Driving Gold Prices?
Speaking to CNBC, Lee stated that stablecoins, including Tether, might be one of gold’s largest buyers today.
“There is an interesting correlation we found, which is that when I look at Tether’s supply of dollars outstanding, it really started to rise about three months ago. And that corresponded with gold essentially going up every day,” Fundstrat’s Head of Research said.
Lee agreed that the current gold rally might be influenced by cryptocurrencies — an asset class that many gold investors have historically been bearish on.
“Tether has proven to be a good meeting ground between Bitcoiners and gold people,” he added.
See Also: Donald Trump Once Said The US Could Pay Off Its $37 Trillion Debt Burden With Bitcoin — But Could It Really?
Tether Is Sitting On A Huge Gold Pile
Tether, the issuer of the world’s largest dollar-pegged stablecoin by market value, held a gold reserve valued at over $8 billion at the end of the second quarter, making it one of the largest gold holders in the world.
The company also uses gold to back its Tether Gold (CRYPTO: XAUT) stablecoin, with at least one troy ounce backing one XAUT token. As of this writing, XAUT tokens have a total market value of more than $1 billion.
Tether has been exploring investments in the gold industry as part of its broader strategy to diversify profits from its cryptocurrency operations.
Schiff Continues To Attack Crypto
Meanwhile, Peter Schiff, a veteran gold advocate and Bitcoin critic, warned cryptocurrency investors of a “rude awakening” and an “expensive lesson.”
“Fortunately, most cryptocurrency owners are young with lots of time to earn back what they’re about to lose,” Schiff said.
Price Action: As of this writing, spot gold was trading at a new high of $4,159.00 per ounce, up 1.24% in the previous 24 hours, according to data from Benzinga Pro. Year-to-date, the yellow metal has surged 54%.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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