- Tether Gold (XAUt) saw its market capitalization surge by 36% in Q1 2025, surpassing $3.3 billion.
- The growth is attributed to a “flight to hard assets” driven by geopolitical tensions and shifting monetary policy.
- Each XAUt token is backed by one troy ounce of physical gold held in reserve, with over 707,700 tokens in circulation.
- Tokenized gold products dominate a niche but growing segment of the broader $31 billion tokenized real-world asset market.
In the first quarter of 2025, Tether‘s tokenized gold product Tether Gold (XAUt) experienced a sharp 36% expansion in reserves as investor demand for bullion increased amid macroeconomic uncertainty. Each XAUt token is backed by one troy ounce of physical gold stored in the company’s reserves.
The company disclosed that 707,741 XAUT tokens were in circulation by the quarter’s end. Tether attributed this significant growth to a broader “flight to hard assets” from geopolitical and monetary shifts.
Gold prices climbed early in the year as investors sought safe-haven assets. However, the metal later pulled back as rate-cut expectations faded and the U.S. dollar strengthened.
Some investors locked in gains after prices briefly peaked above $5,500 a troy ounce. Gold was trading around $4,500 per troy ounce at the time of reporting.
Year to date, XAUT’s US dollar price is up 4.37%, according to Yahoo Finance data. XAUt now accounts for over half of the tokenized gold market, with its closest competitor, PAX Gold (PAXG), holding a nearly $2.2 billion market cap.
Together, these tokens dominate a growing market segment that brings traditional commodities onto blockchain rails. Their growth reflects rising demand for easier exposure to physical assets without handling storage.
These assets allow gold to be traded around the clock and transferred globally. They sit within a broader market for tokenized real-world assets valued at nearly $31 billion, according to industry data.
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