Tether Gold Shines as Stablecoins Hit $240B in Flight to Safety

Key Takeaways

• Stablecoin market capitalization is approaching $240 billion, led by strong demand for USDT.
• Tether’s XAUT remains the largest tokenized gold product by market value.
• Gold prices have pulled back from recent highs but remain supported by central bank buying and geopolitical tension.

As global markets wobble under the weight of inflation, geopolitical uncertainty, and trade policy shifts, investors are parking their capital in places they perceive as safer—namely, stablecoins and gold.

In crypto, that trend is manifesting in two ways: a sharp uptick in stablecoin market capitalization and a renewed spotlight on Tether Gold (XAUT) , a tokenized representation of physical gold.

Tether Gold Holds Ground as Top Tokenized Asset

Tether’s XAUT, a stablecoin pegged to physical gold, continues to lead its niche with a market cap hovering around $770 million.

Each token is backed 1:1 by a troy ounce of gold stored in Swiss vaults and sourced from LBMA-certified suppliers. The product now falls under El Salvador’s digital asset framework.

As of April 21, the token reached an all-time high of $3,423, up 9.6% from the end of Q1.

According to Tether , the demand for XAUT stems from its role as a “bridge to traditional assets,” offering physical gold exposure with blockchain-level liquidity and transparency.

Paolo Ardoino, CEO of Tether, described it as a hedge that “delivers the security of gold with the convenience of digital transfer.”

Central bank buying remains a powerful tailwind for gold. In 2024, countries, especially among the BRICS bloc, added over 1,000 metric tons to global reserves, which now total roughly 37,755 tons.

Stablecoin Market Inches Toward Milestone

Meanwhile, the total value of stablecoins in circulation is nearing $240 billion. Data from DeFiLlama shows the market grew by 2% in just one week, adding $4.58 billion.

USDT continues to dominate, with a supply of $148 billion. USDC is second, at $62.3 billion.

Some of the biggest weekly gains came from smaller players: Tron’s USDD jumped 13%, Ripple’s RLUSD climbed 7.9% to $317 million, and Sky’s USDS rose 7.9% to $4.2 billion. BlackRock’s BUIDL product also ticked up 3.5% to $2.5 billion.

Ethena’s USDe, which previously surged in popularity, saw a 1.3% dip this week and is down 10% for the month.

Gold Settles After Surge, but Bullish Case Remains

While its digital alternative pumps, physical gold prices , after briefly hitting a record $3,500, have entered a period of consolidation.

“Near-term range trading is likely to persist, but the medium- to long-term bullish trend remains firmly intact,” said Dilin Wu, Research Strategist at Pepperstone, in a comment to CCN.

Several forces are shaping gold’s path in the months ahead: the Fed’s rate stance, U.S. tariff negotiations, and the evolving labor market outlook.

Wu notes that any signs of labor weakness, such as job gains falling below 100,000 or a rising unemployment rate, could revive expectations for rate cuts by June.

That, in turn, could trigger another rally in gold.

“Traditional drivers such as central bank gold buying, heightened geopolitical risks, and declining real interest rates should continue to support gold prices,” Wu added.