Gold has risen to new all-time highs well beyond 4,000 per ounce this year, going on a run that many in the sector saw coming and generating mainstream attention. I've spent a lot of time speaking to experts about what's been driving the gold price higher this year. And we've covered many familiar factors including strong central bank buying, geopolitical and trade tensions, interest rate cuts, and the trend toward ddollarization. Those elements and more have contributed to gold's rise. But recently, I've seen


discussions emerge about another factor that may be in play. [music] Purchases from Tether. Before we get into the recent Tether news, let's take a step back and look at what Tether actually is. [music] The company is a stablecoin issuer that's mainly known for USDT, a US dollar focused stable coin, but it issues other stable coins as well. According to Tether, stable coins get their name because they're pegged on a onetoone basis to a fiat currency and as a result offer stability. Tether also offers a digital


token that's backed by physical gold with one token representing ownership of an ounce of the metal. Tether launched its gold token in 2020, but the company really started turning heads in the gold space this summer when it took a stake of just over 30% in elemental royalty, then called Elemental Altus royalties. Tether said the move was part of its broader strategy to add long-term stable assets such as gold and Bitcoin into its ecosystem. At the time, the company said it held over 100,000 Bitcoin and close


to 80 metric tonses of gold plus its Tether Gold token. I heard from Matt Guyger of MJG Capital Fund after the deal was announced and while he emphasized that it was still early, he thought the move could prove to be significant. I I talked about this at length um in the MJG investor letter was Tether um one of the world's largest cryptocurrency players uh coming into Elemental Altus. This was announced in early June and taking a controlling stake in the company. They now own over 50% of elemental altis. Um, you know,


this is a company or a group that really should have no business investing in hard assets or natural resources. So, you know, I don't want to draw too broad of a conclusion from a single transaction, but I think looking back a few years uh to, you know, this this spring and this summer, one could say that that was a sign that non-traditional mining investors were starting to wade back into the space after what's really been an over decadel long absence um of of those sort of investors cuz why would you be anywhere


else than than the broader US stock market or cryptocurrencies which have also behaved well? that's been what's working. Um, but I I think I think in hindsight, Tether's move may may prove to be quite significant. >> The latest Tether news goes beyond the company's connection to Elemental. In a recent report, analysts at Jeffre said Tether accounted for nearly 2% of total gold demand in the third quarter of the year, putting it ahead of even the top central bank buyers. The investment bank


also states that in total, tether now has 116 metric tonses of the yellow metal, making it the largest non-entral bank holder of gold. Of that amount, 12 metric tonses are being used to back Tether's gold token. The other 104 metric tonses are reportedly held as part of USDT's reserves. Various news outlets have pointed out some dissonance in what's happening here. That's because the Genius Act, which was signed into US law in July, doesn't allow stable coin issuers to use gold as a reserve asset.


So, if we put all of this together, what does it mean? Jeffre indicates that Tether intends to buy around 100 metric tons of gold in 2025 in addition to making investments elsewhere in the gold space. Aside from its interest in Elemental, Tether has bought stakes in gold royalty, metallo royalty and streaming, and Versameat royalties. With that in mind, there's no denying that Tether has been a big buyer of gold recently, and it seems likely that its purchases have provided price support this year. Its activity also highlights


growing interest in gold from more mainstream entities. However, at this point, Tether is still just one driver among many for the precious metal, not the beall endall factor to watch. One point to keep an eye on is how the implementation of the Genius Act plays out. [music] Tether is reportedly planning to launch USAT, a new US focused stable coin by the end of this year. It will be compliant with the act, meaning it won't have gold as a reserve asset. [snorts] It may also make sense to monitor investor appetite for


tokenized gold. [snorts] Interest in gold has surged this year alongside the price and will probably keep doing so if the metal continues to go up. Tokenized options may appeal to new entrance looking for convenience, but that doesn't change the fact that many people believe exposure to physical metal is the best option. This is just a quick look at a complex situation, but it's a topic I'll definitely be raising with future guests on our channel. For now, I'm curious to know what you think about


Tether's moves in the gold space. [music] Are they positive or concerning? And is there more to come? Leave a comment below with your thoughts and questions. Thank you for watching. If you like this video, make sure you hit the like button and subscribe to our channel. We'd also love to hear your thoughts, so leave us a comment below. [music]