Whales Larp up Tether Gold as the Precious Metal Value Rises

The demand for Tether Gold (XAUT) has surged following the precious metal’s new all-time high. According to Lookonchain, crypto whales are now stockpiling the tokenized gold.

Citing on-chain data, the analytics account on X identified two whales who bought sizable amounts of Tether Gold in the past week. One of them, casualpig.eth bought 4,463 XAUT worth $18.7 million in the past week. Another whale, 0xdfcA, also purchased $12.1 million worth of XAUT in that period.

Tether Gold Flips Paxos Gold as Biggest Tokenized Gold

The surge in interest from whales coincides with the rapid rise in the Tether Gold market cap. According to data from Defillama, the market capitalization of XAUT has nearly doubled over the past two months.

At the start of August, XAUT had a market cap of around $830 million. However, that soared to $1.27 billion by August 12 and has been on a steady rise since then. It is now at $1.58 billion, its highest level ever.

While the surge in the Tether Gold market cap is partly due to gold rising in value over that period, it is not the only reason. A breakdown of XAUT  token balances by raw quantity also shows that the amount of tokens went from 246,524 on August 6 to 375,572 XAUT by August 11.

This indicates that the surge in the circulating supply of Tether Gold was a significant contributor to its increasing market capitalization.  Interestingly, the increase in XAUT’s market cap means it has now surpassed Paxos Gold (PAXG) as the largest tokenized gold token.

PAXG, with a market capitalization of $1.31 billion, has been the largest tokenized gold token in the market until the XAUT supply increased. However, PAXG has also seen a consistent rise in its circulating supply. It now stands at 306,672 tokens, up from around 282,000 at the start of August.

Interestingly, PAXG is trading slightly better than XAUT. According to CoinMarketCap, PAXG is currently worth $4,235, while XAUT is $4,215. However, both tokenized gold coins are trading at a better price than gold itself, which is now at $4,211 per ounce.

Gold Rising Value and Institutional Adoption Driving Tether Gold

Meanwhile, the rise in XAUT supply is also partly due to its increasing adoption by institutional investors. At least one company has announced the adoption of Tether Gold as a treasury asset.

The Nasdaq-listed Prestige Wealth recently purchased $134 million worth of XAUT for its treasury. It is now planning to change its name to Aurelion  Inc., becoming the first XAUT treasury company.

The company plans to lend the XAUT to its parent company, Antalpha, which will use it as collateral for loans through its Prime platform. Not surprisingly, Tether holds an 8.1% stake in Antalpha.

The company, which is mostly known for its dominant USDT stablecoin, has been expanding its stake in the gold sector. A recent report claimed that Tether is planning to invest heavily in the gold supply chain, mining, refining, and royalty companies.

Tether already owns almost 38% stake in Canadian gold royalty company Elemental Altus. This is part of its diversification efforts even as it maintains dominance in the stablecoin sector.

Meanwhile, the rising value of gold has also increased interest in the precious metal. Although it is already at an all-time high, analysts predict that it could reach $5,000 by the end of 2026.