Tether Gold (XAUT) Surpasses $2 Billion Market Cap as Tokenized Gold Demand Soars

Tether's gold-backed token, XAUT, has exceeded a $2 billion market capitalization, reaching approximately $2.1 billion, according to recent reports. This milestone represents a rapid increase from its $1.44 billion valuation at the end of the third quarter, driven by rising gold prices and growing institutional interest in tokenized real-world assets.

The token is fully backed by physical gold stored in Switzerland, with reserves totaling 375,572 fine troy ounces as of September 30, valued at around $1.44 billion based on end-of-quarter prices. Tether confirmed that approximately 522,089 XAUT tokens are in circulation, with an additional 139,751 tokens available for sale, indicating capacity for further demand. All gold is held under stringent London Good Delivery standards, and token holders retain the right to redeem for physical bars delivered to a Swiss address.

Tether CEO Paolo Ardoino emphasized the significance, stating, "Tether Gold proves that real-world assets can thrive on-chain without compromise. With gold prices at all-time highs and institutional interest in tokenized assets growing, XAU® represents the future of asset ownership—where physical security meets digital freedom." The broader tokenized gold market is valued at $3.72 billion, with Tether Gold and its main competitor, PAX Gold (PAXG), accounting for about 90% of this sector.

Regulatory focus on tokenization is increasing, with SEC Commissioner Hester Peirce highlighting it as a key agency priority and emphasizing the importance of bringing traditional assets like stocks and Treasuries onto the blockchain. Institutionally, the token gained momentum after a $150 million financing round led by Antalpha Platform Holding Company to convert a Nasdaq-listed shell into Aurelion Inc., which will use Tether Gold as its primary treasury asset, marking a significant vote of confidence in blockchain-based real-world assets.

Despite the bullish trends, analysts warn that gold's record-breaking rally may be slowing, with prices potentially falling to $3,500 per ounce by 2026 due to factors like fear-of-missing-out driven surges and shifting market momentum. However, this has not dampened the immediate growth in tokenized gold, reflecting a broader "debasement trade" where investors seek safety amid concerns over national debt and currency decline.