Tether’s Gold-Backed Stablecoin in Demand as Commodity Hits ATH
The Tether Gold stablecoin was valued at $1,902 on July 24, putting the price of gold within reach of the commodity’s all-time high set in September 2011.
According to The Wall Street Journal, the commodity set a new record for closing price at $1,897.50 on July 24, but has yet to reach its record intraday high of $1,921 from 2011. Gold has risen 22.7% from $1,550 to $1,902 since Tether Gold (XAUT) — a stablecoin allowing ownership of one troy ounce of gold held in a Swiss vault controlled by the company — was released on Jan. 23.
The surge comes just three days after the U.S. government announced a second stimulus bill to counter the economic impact of the COVID-19 pandemic.
“In times of uncertainty, people like having accessibility to gold,” said Paolo Ardoino, Tether Chief Technology Officer (CTO). He continued:
“The increasing demand for Tether Gold is reflected by an 8.4% increase in its price over the past 30 days, as well as its current market capitalization of over $92 million.”
Bitcoin or gold?
The price of Bitcoin (BTC) briefly rose above $10,000 today after a particularly long stretch of low volatility between $9,000-$9,500.
However, for gold bugs like Peter Schiff, traders who invest in Bitcoin are not looking for stability. He said that investors aren’t going to “get rich on gold” — or, consequently, gold-backed stablecoins — but they assume less risk in losing more from volatile crypto prices.
Today Schiff continued to push the idea that “a big drop” in BTC price was inevitable:
Two of the last three times #Bitcoin rose above $10,000 in Oct. of 2019 and in Feb. of 2020 it soon fell by 38% and 63% respectively. The last time Bitcoin rose above $10,000 was in May, and it only fell by 15%. It's above $10,000 again today. How big will the next drop be?
— Peter Schiff (@PeterSchiff) July 27, 2020Meanwhile, Tether’s USD-backed stablecoin (USDT) reached a market capitalization of more than $10 billion on July 22.