The Rapid Rise Behind Tether's XAUt Stablecoin

Recently, the analysis reports of the cryptocurrency market frequently mention the rise of USDt. Indeed, multiple factors are driving the market value of USDt to continuously climb. However, in addition to the widely watched USDt, Tether has also issued other asset-backed stablecoins, among which the most outstanding is the gold-pegged XAUt.

Data shows that since XAUt was launched in late January this year, its market value has risen to around $86 million, with a daily trading volume exceeding $110,000, and it is currently listed on five exchanges. The rapid rise of XAUt has attracted widespread attention in the industry.

The main reasons are as follows:

First of all, XAUt provides investors with a convenient channel for gold investment. Each XAUt is pegged to 1 ounce of physical gold, and investors do not need to pay custody fees, as they can redeem physical gold with XAUt. The minimum trading unit can be divided up to six decimal places and supports 24-hour trading.

Secondly, changes in the global economic environment have boosted the demand for XAUt. The economic crisis triggered by the COVID-19 pandemic and the loose monetary policies of central banks around the world have prompted investors to seek safe-haven assets such as gold. XAUt, as "digital gold", has become a new choice for investors to hedge against risks.

In addition, many trading platforms have developed a variety of trading products around XAUt. Currently, the focus is mainly on derivatives, including perpetual contracts, fixed-term contracts, and leveraged trading. Some platforms also plan to introduce XAUt into the Lightning Network to further enhance its trading convenience.

However, XAUt still faces many challenges to grow into the next USDt. First, the stablecoin market anchored by gold is highly competitive, with several similar projects failing. Second, XAUt's volatility is higher than that of USDt, and its issuance is more difficult. Furthermore, Tether's ability to respond during gold supply shortages remains to be tested.

Nevertheless, the industry remains cautiously optimistic about the future of XAUt. Some experts predict that gold-backed stablecoins represented by XAUt could reach a market value of hundreds of billions of dollars in the future.

As the cryptocurrency market continues to develop, it is worth our continued attention whether Tether can secure a place in the "digital gold" space through XAUt.