Tether, known as the issuer of the stablecoin USDt, is making strategic strides to enhance its portfolio by investing capital into various points of the gold supply chain. These efforts aim to diversify Tether’s portfolio risk, marking a significant move in the company’s strategic journey.
Tether’s Gold Strategy
The company is exploring capital distribution in the gold sector, which includes mining, refining, trading, and royalty companies. This approach highlights Tether’s intent to diversify its investments beyond traditional assets.
In Zurich, Switzerland, Tether has amassed physical gold valued at approximately $8.7 billion, stored in a secure vault. These reserves support their gold-backed stablecoin, Tether Gold (XAUT), which has a market value of around $1.4 billion.
As Tether turns to gold, it broadens its risk profile significantly. While 80% of its $162 billion reserves consist of U.S. Treasury bills and short-term deposits, this new focus offers a hedge against traditional financial risks. The company’s audit report from June revealed a net profit of $5.7 billion in the first half of 2025. Since the start of 2025, gold prices have soared, with today’s prices approaching $3,600 per ounce—a 36.5% increase.
Tether has previously engaged with commodity markets. In October 2024, it considered lending part of its profits to commodity traders. By November 2024, it had already ventured into oil trading with a $45 million financed crude oil transaction.
According to Bloomberg, Tether increased its stake in Canadian royalty company Elemental with a $100 million share acquisition. The stablecoin issuer already owns 37.8% of Elemental, which generates revenue from gold mining operations.
What This Move Signifies
Tether’s new strategy underscores a rising trend in the crypto world toward diversification and real-world assets. By diversifying its reserves, Tether seeks to surpass the conventional model reliant on the U.S. dollar and short-term debts, aiming for a more robust portfolio with varying risk profiles.
Historically, gold provides a hedge against inflation and stands as a safe haven during geopolitical uncertainties. Tether’s investment in the gold supply chain, beyond just offering a gold-backed stablecoin (XAUT), signals its confidence in this valuable commodity. This move holds potential for maintaining and increasing the value of its reserves.
In diversifying its reserves, Tether reduces its dependency on U.S. Treasury bills. This strategy could help mitigate risks associated with interest rate rises or U.S. economic fluctuations. However, direct investment in commodity markets introduces new risks, such as operational, geopolitical, and environmental vulnerabilities in gold mining and refining.
Furthermore, Tether’s approach illustrates the increasingly blurred lines between traditional finance and the crypto world. Stablecoins are evolving beyond simple price anchors to become complex financial entities with sophisticated reserve management and investment strategies. This evolution highlights the need for increased transparency and trust in the market. Regular audits by Tether play a crucial role in bolstering this confidence.
