Demand for Tether’s Stablecoin Pegged to Gold Rises as Yellow Metal Trades Close to All-Time High
Tether Gold stablecoin hit a price of $1,902 two days back, a level close to the yellow metal’s historical high of $1,921 recorded in September 2011. Since the launch of Tether Gold (XAUT), gold has gained 22.7% – from $1,550 to $1,902.
Tether Gold (XAUT) is pegged to gold, with the company holding equivalent troy ounces in a Swiss vault.
As per The Wall Street Journal, Aurum (Latin name for gold) hit a record $1,897.50 on July 24, but is yet to reach the 2011 high.
The sharp rise in price has happened only three days after the US government revealed that a second stimulus package is in line to be released for negating the negative impact of Covid-19 pandemic.
“In times of uncertainty, people like having accessibility to gold,” said Paolo Ardoino, Tether Chief Technology Officer (CTO). “Tether Gold is clearly a product that resonates in these times.”
Bitcoin spiked above $10,000 yesterday after remaining range bound between $9,000 and $9,500 for several weeks. Nevertheless, gold advocates such as Peter Schiff believe that Bitcoin investors are not bothered about stability.
He stated that investors will never make a fortune by investing in gold or gold pegged stablecoins, but will be able to minimize risk in comparison to investors in cryptos, which are marked by volatility.
Schiff continued to argue that a steep decline in the price of Bitcoin cannot be avoided:
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, 2020
In the meantime, Tether’s USD-pegged stablecoin (USDT) hit a market cap of over $10 billion.