Digital Gold Rush: Institutional Demand Drives Tether Gold to New Heights

With gold prices hitting historic highs in 2025, Tether Gold (XAUt), a blockchain-based digital asset backed by physical gold, is gaining strong traction among central banks and institutional investors seeking a stable and secure store of value in today’s volatile economic climate.

Currently backed by 7.66 metric tons of physical gold and boasting more than 259,000 tokens in circulation, XAUt has a market capitalization exceeding $800 million (AU$1.22 billion). The token mirrors the spot price of gold and has seen a 40% increase in value over the past year.

With gold now trading at under $3,400 per ounce (AU$5,169), Tether Gold offers investors a digital alternative to traditional bullion, combining the safety of gold with enhanced liquidity.

This surge in interest is part of a broader global gold-buying trend led by central banks, which collectively acquired over 1,000 metric tons in 2024, the third consecutive year of net purchases at that scale. According to the World Gold Council, most monetary authorities plan to continue growing their gold reserves in the year ahead.

This marks a significant shift from past decades, when central banks were net sellers of gold. Christopher Gannatti of WisdomTree attributes the change to mounting geopolitical risks and growing concerns over the politicization of monetary systems during international conflicts.

The institutional sector is also following suit. Gold exchange-traded funds (ETFs) recorded $38 billion (AU$57.78 billion) in inflows during the first half of 2025, adding 397.1 metric tons to their holdings, fueled by fears of inflation, recession, and global economic instability.

On the trading front, Tether Gold is available on several major global platforms including Bybit, Bitfinex, KuCoin, and Maxbit (Thailand).

It is worth noting that its reach has recently expanded further with the launch of a multi-chain version on The Open Network (TON), supported by Tether’s cross-network liquidity solution, USDT0.