Despite the benefits associated with gold, analysts have warned that the record-breaking increase in gold prices may come to a halt.
Tether recently shared its report for the third quarter regarding Tether Gold tokens, confirming that each token is fully backed by physical gold stored in Switzerland.
This followed data from TG Commodities S.A. de C.V., based in El Salvador, which highlighted that as of September 30, Tether’s reserves consisted of 375,572 fine troy ounces of gold. Based on its end-of-quarter reference price, the value of this gold was estimated to be about $1.44 billion.
The stablecoin issuer also noted that approximately 522,089 XAUT tokens are in circulation, and an additional 139,751 tokens are currently available for sale. This illustrated the availability of more stock that had been allocated but not yet released.
Tether Gold tokens play a significant role in blockchain technology
Following Tether’s recently shared report about Tether Gold tokens, sources indicate that the market value of XAUT has significantly increased, reaching a new record of approximately $2.1 billion amid rising gold prices. This record is more than doubling from less than $850 million in August.
This situation triggered the CEO of Tether, Paolo Ardoino, to comment, stating that Tether Gold demonstrates that real-world assets can thrive on blockchain without compromise.
He further highlighted, “With gold prices reaching record highs and growing interest from institutions in tokenized assets, XAU₮ symbolizes the future of asset ownership — where physical security meets digital freedom.”
Regarding his remarks, analysts revealed that when Tether Gold and PAX Gold are combined, they account for around 90% of the $3.7 billion market for tokenized gold.
They also acknowledged that the token is one of the blockchain’s most significant real-world asset products. Additionally, it is part of a larger trend in the crypto ecosystem whereby institutions and regulators are shifting their focus towards tokenization.
Interestingly, even the US regulators have expressed growing interest in the process. To support this claim, sources close to the situation mentioned that Hester Peirce, the current commissioner at the Securities and Exchange Commission (SEC), who serves on its crypto task force, stated that tokenization is now a key focus for the agency.
Peirce also emphasized the significance of introducing traditional assets such as stocks and Treasuries onto the blockchain as a common policy and market goal.
Analysts warn that gold’s record-breaking rise might be coming to a stop
The increase in tokenized gold also reflects a broader shift that some individuals on Wall Street refer to as the “debasement trade.”
In a statement, BlackRock’s CEO, Larry Fink, highlighted that this week, he discovered that investors viewed gold and crypto as “assets of fear” due to growing concerns about national debt and currency decline in the industry. Hence, according to him, they considered them financial and physical safety protection.
However, despite the benefits surrounding gold, analysts have warned that gold’s record-breaking increase may come to an end. Following months of an unstoppable monster rally, gold has finally run out of breath.
As previously reported by Cryptopolitan, the metal that broke records to reach $4,400 an ounce is now collapsing back below the $4,000 level, forcing traders to face what the charts indicate — this is a consolidation, not a total collapse.
Shares up to the Gold Bullion Cycle. According to Katie Stockton, both gold bullion and mining shares are beginning an extended ‘time out’ period, which may not end until well into 2025.
This announcement was released after Capital Economics informed Business Insider that the surge appears to be mostly driven by the fear of missing out, leading to a “mini-bust.” Regarding these concerns, they shared their forecast that gold prices could fall back to $3,500 per ounce by 2026.
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