Amid gold prices relentlessly smashing historical records and tokenized gold PAXG fueling heated controversy with depegging scandals, Tether Gold (XAU₮) has boldly surged ahead through gold reserves partnerships, crushing its market share rivals. 

Issued by Tether, XAU₮'s total market capitalization has overtaken PAXG to exceed $1.5 billion. Tether CEO Paolo Ardoino asserted: Demand from institutional investors and retail traders for XAU₮ escalates every day, as Bitcoin and gold wage war against the failing fiat system engulfed in financial darkness.

XAU₮ Enters Gold Reserve Company

Tether and Antalpha Platform Holding, a financial services company closely collaborating with crypto mining firm Bitmain, are raising at least $200 million for a digital asset finance company (DAT) to reserve Tether's gold token XAU₮.

DL Holdings Group Limited, listed in Hong Kong (stock code 1709), has also announced a comprehensive strategic partnership with Antalpha, valued at up to $200 million, covering tokenized gold assets and Bitcoin mining infrastructure, establishing a dual-track strategy connecting traditional finance and digital finance.

DL Holdings plans to acquire or issue tokenized gold assets worth up to $100 million in the form of Tether Gold (XAU₮), enabling institutional and retail investors to conveniently invest in on-chain gold through familiar channels such as brokerage accounts and structured products. Antalpha will provide liquidity, custody, and collateralized lending services for XAU₮. Through its RWA Hub platform, it will also establish physical gold vaults in major global financial centers to simplify the gold redemption process.

Gold Up 62% This Year, Can Tokenized Gold Capture More Market Share?

Gold has been one of the most standout assets in recent years, rising 62% year-to-date, surpassing the returns of most stocks.

As Trump's trade wars and out-of-control budget deficits shake people's confidence in other traditional safe-haven assets (namely sovereign debt and currencies, especially the US dollar), gold's safe-haven status has been elevated. Investors are not only flocking to gold but also to silver, other precious metals, and even Bitcoin, participating in so-called currency devaluation trades.

Over the past 15 years, central banks around the world have been net buyers of gold, with purchases accelerating significantly after Russia's invasion of Ukraine. The freezing of Russian central bank funds held by the US and its allies highlights how foreign currency assets can easily be affected by sanctions.

However, since gold is a physical asset, holders must pay for storage, security, and insurance costs. Tokenized gold provides investors with an alternative way to invest in gold, without paying ETF management fees or bearing the storage costs and carrying risks of physical gold bars. Currently, the largest issuers of tokenized gold are stablecoin issuers Paxos and Tether, with Tether taking this opportunity to overtake Paxos through its partnership with a gold reserve company.

Nevertheless, the price stability of on-chain assets remains a concern for investors, especially with the recent PAXG depegging event triggering liquidations. Tether Gold has earned considerable trust due to its relatively stable price in this instance, and it is worth watching whether it can leverage gold's rise to capture more market share in the future.

Disclaimer: None of the information contained here constitutes an offer (or solicitation of an offer) to buy or sell any currency, product or financial instrument, to make any investment, or to participate in any particular trading strategy.