Tether Gold Reserves Reach 11 Tons as XAUT Market Cap Hits $2.1 Billion

TLDR

• Tether held over 375,000 ounces (11.6 tons) of physical gold in Switzerland to back its XAUT token as of September 30, 2025
• XAUT market cap doubled from $850 million in August to $2.1 billion in October as gold prices hit record highs near $4,500 per ounce
• Rising demand came primarily from retail investors in emerging markets who lack access to traditional gold investment products like ETFs
• XAUT and PAX Gold together control roughly 90% of the $3.7 billion tokenized gold market
• Analysts warn gold’s rally may pause, with some predicting prices could drop to $3,500 per ounce by 2026

Tether’s gold-backed cryptocurrency token reached a new milestone in the third quarter of 2025. The company held more than 375,000 ounces of physical gold bars in Switzerland to back its XAUT token as of September 30.

TG Commodities, which issues XAUT under El Salvador’s digital asset framework, confirmed each token represents one fine troy ounce of gold. The total reserves equal approximately 11.6 tons of the precious metal.

The market capitalization of XAUT grew from less than $850 million in August to $2.1 billion by October. This growth coincided with gold prices reaching record levels near $4,500 per ounce.

Tether CEO Paolo Ardoino told CoinDesk that retail investors in emerging markets drove most of the demand. These investors often lack access to traditional gold investment vehicles like exchange-traded funds or metals accounts.

Tokenized gold allows people to hold blockchain-based representations of physical gold in crypto wallets. Users avoid the challenges of storing and securing physical bullion while maintaining exposure to gold prices.

Tokenized Gold Market Share

XAUT and PAX Gold combined account for about 90% of the $3.7 billion tokenized gold market. This makes tokenized gold one of the largest real-world asset categories on blockchain networks.

The growth reflects broader interest in tokenization from institutions and regulators. SEC Commissioner Hester Peirce stated that tokenization has become a key focus for the agency.

Peirce highlighted the importance of bringing traditional assets like stocks and Treasury bonds onto blockchain platforms. She described this as a common policy and market goal.

Concerns About Gold’s Rally

BlackRock CEO Larry Fink described gold and crypto as “assets of fear” this week. He noted that investors view them as protection against national debt concerns and currency devaluation.

However, some analysts believe gold’s rally may be ending. After months of gains that pushed prices above $4,400 per ounce, gold fell back below $4,000.

Katie Stockton from Fairlead Strategies said gold bullion and mining shares are entering an extended consolidation period. This pause may continue into 2025.

Gold recently closed below a key price level and triggered sell signals on technical indicators. These signals suggest short-term momentum has turned negative.

Capital Economics told Business Insider the surge appears driven by fear of missing out. The firm predicts gold prices could fall to $3,500 per ounce by 2026.

Currently, approximately 522,089 XAUT tokens are in circulation. An additional 139,751 tokens have been allocated but not yet released to the market.

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