Tether Plans 15% Portfolio Allocation to Gold Amid Market Uncertainty

Tether, the cryptocurrency group headquartered in El Salvador, announced plans to allocate between 10% and 15% of its investment portfolio to physical gold, according to CEO Paolo Ardoino. This decision adds to the amount of gold that the company claims already backs some of its financial products.

As of now, Tether holds approximately 130 metric tons of physical gold, having acquired an additional 27 tons in the fourth quarter of 2022. Ardoino stated that the company is purchasing about two tons of gold each week. In a video interview with Reuters, he expressed his view on balancing investment interests, saying, “For our own portfolio, it’s reasonable that we are going to have around 10% in Bitcoin and 10% to 15% in gold.”

Despite this significant commitment, Ardoino refrained from disclosing the total value of Tether’s investment portfolio or the specific portion allocated to physical gold. The firm aims to retain ownership of the gold stored in Switzerland and plans to assess its bullion purchases on a quarterly basis.

Tether’s gold buying strategy began in 2020 during the COVID-19 pandemic and has continued as geopolitical tensions have escalated. Ardoino noted the current global climate, saying, “The world is not in a happy place at this moment. Gold is making all-time highs every single day. Why? Because everyone is scared.” In 2022, gold prices surged by 64%, and they have continued to rise, with a 22% increase recorded so far in 2023. On January 25, gold reached a record high of $5,311 per troy ounce, driven by decreasing confidence in the U.S. dollar and concerns regarding the independence of the U.S. Federal Reserve.

Tether’s gold purchases are intended to back its USDT stablecoin, which currently has a market capitalization of around $186 billion, as well as the Tether XAUT gold token, valued at $2.7 billion. Ardoino emphasized the vital role gold plays in the company’s strategy, indicating that Tether is committed to diversifying its asset base through investments in U.S. Treasury bills, Bitcoin, and other assets.

Looking ahead, Ardoino projects that Tether’s profit for 2026 could surpass the estimated $10 billion expected for 2025 and the $13.7 billion forecast for 2024. Tether employs approximately 250 people and continues to expand its investment strategy across various sectors, including technology and gold royalty firms.

In a rapidly changing economic landscape, Tether’s approach to incorporating gold into its portfolio reflects a broader trend among investors seeking stability amid market volatility. As the company navigates these challenges, its commitment to maintaining a diverse range of assets could provide a buffer against ongoing uncertainties in the financial markets.