Tether Gold Dominates On-Chain Gold Trading Amid Record Demand
Tether Gold (XAU₮) has surpassed $4 billion in market capitalization, capturing over 60% of the gold-backed stablecoin market. This milestone coincides with unprecedented demand for tokenized real-world assets as investors seek hedges against macroeconomic instability.
The gold-backed stablecoin sector grew from $1.3 billion to $4 billion in 2025, with XAU₮ leading both issuance and circulation. Physical gold reserves backing the token now exceed 520,000 fine troy ounces, fully collateralized on a 1:1 basis.
Spot gold prices breached $5,000/oz during this period, while gold ETF holdings surged by 397 tonnes in H1 2025, reaching a record 3,932 tonnes by November. Geopolitical tensions and institutional adoption of on-chain assets are driving this paradigm shift in gold ownership.