Tether’s Strategic Investment in Gold Mining: A New Frontier for Cryptocurrency Profits
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Tether’s Bold Move into Gold Mining
Tether, renowned for issuing the market’s most traded stablecoin, USDT, is reportedly venturing into the gold mining sector. This strategic move aims to leverage Tether’s substantial cryptocurrency earnings by investing them in the metals market. According to a recent report from the Financial Times, Tether is eyeing opportunities across the gold supply chain, including mining, refining, trading, and royalty companies.
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Gold: The Bedrock of Value
Paolo Ardoino, Tether’s CEO, has praised gold, likening it to a “natural Bitcoin.” Earlier this year, he articulated a vision that diverges from the conventional view of Bitcoin as “digital gold,” instead emphasizing gold’s role as a “foundational asset.”
Tether’s interest in gold has astonished many in the traditional mining sector, sparking speculation about the company’s strategic direction and its potential for success. A mining executive noted Tether’s unconventional approach, suggesting that while the company values gold, it may lack a well-defined strategy for navigating this established industry.
As a highly profitable player in the cryptocurrency space, Tether boasts a market capitalization of $168 billion. In the first half of this year alone, the company generated $5.7 billion in profits. Additionally, Tether is one of the largest holders of US Treasuries, leveraging these investments to earn interest and support its stablecoin operations.
Tether has already made significant inroads into the gold market, holding $8.7 billion worth of gold bars in a Zurich vault, which underpins its stablecoin issuance.
Tether’s Alliances: Merging Crypto and Gold Markets
Recently, Tether Investments acquired a minority stake in the gold royalty company Elemental Altus for $105 million. This acquisition was bolstered by an additional $100 million investment following Elemental’s merger with competitor EMX.
Juan Sartori, who spearheads business initiatives at Tether, shared with the Financial Times that these investments are part of a broader strategy to increase the company’s exposure to gold.
Beyond its gold royalty investments, Tether has engaged in discussions with Terranova Resources, a gold mining investment entity based in the British Virgin Islands, although no formal agreement has been reached to date.
The stablecoin issuer’s venture into gold also includes the XAUt token, a cryptocurrency backed by physical gold. Despite its relatively modest market presence compared to USDT, this initiative underscores Tether’s commitment to integrating cryptocurrency with tangible assets.
Notably, other companies like Blue Gold are also delving into the intersection of crypto and gold. Blue Gold plans to introduce digital tokens tied to its future gold production, reflecting a growing belief in the potential global appeal of gold-backed tokens.
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