Tether Eyes Gold Mining As New Frontier For Crypto Profit Deployment

Tether, the issuer of the market’s largest stablecoin by trading volume, USDT, is reportedly in discussions to invest in gold mining. The company aims to channel its substantial cryptocurrency profits into the metals market. 

According to a recent Financial Times report, Tether is exploring opportunities across the entire gold supply chain, including mining, refining, trading, and royalty companies. 

Gold As Foundational Asset

Paolo Ardoino, Tether’s CEO, has expressed a strong affinity for gold, referring to it as “natural Bitcoin.” In a speech earlier this year, he articulated a perspective that contrasts with the common view of Bitcoin as “digital gold,” instead emphasizing that gold represents “a foundational asset.”

Per the report, Tether’s interest in gold has surprised many within the traditional mining sector, raising questions about the company’s strategy and its potential for success. 

One mining executive remarked on Tether’s unconventional approach, suggesting that while the company appreciates gold, it lacks a clear strategy for navigating this established industry.

As one of the most profitable entities in the cryptocurrency space, Tether boasts a market capitalization of $168 billion. The company generated $5.7 billion in profits in the first half of this year and is also known as one of the largest holders of US Treasuries, earning interest from these investments to support its stablecoin.

Tether has already made significant strides in the gold market, holding $8.7 billion worth of gold bars in a Zurich vault, which serves as collateral for its stablecoin issuance. 

Blue Gold Joins Tether In Bridging Crypto And Gold Markets 

Recently, Tether Investments, the arm responsible for managing the company’s profits, acquired a minority stake in the gold royalty company Elemental Altus for $105 million. This investment was complemented by an additional $100 million infusion into Elemental following its merger with rival EMX. 

Juan Sartori, who leads business initiatives at Tether, told the Financial Times that these investments are part of a broader strategy to enhance the company’s exposure to gold.

In addition to its investments in gold royalties, the crypto company has also engaged in discussions with Terranova Resources, a gold mining investment vehicle based in the British Virgin Islands, although no deal has materialized. 

The stablecoin issuer’s foray into gold also includes the XAUt token, a cryptocurrency backed by physical gold, though its market presence is relatively modest compared to USDT.

The report highlights that other firms, such as Blue Gold, are also exploring the intersection of cryptocurrency and gold. The gold mining company plans to introduce digital tokens linked to its future gold output, reflecting a belief that gold-backed tokens could gain global traction.

Featured image from DALL-E, chart from TradingView.com