"Buys 1–2 tonnes every week"…Tether made $5bn from the gold rally

Tether, the issuer of the dollar-pegged stablecoin USDT, has generated profits of $5 billion (about 7.2 trillion won) over the past four months from gold it has stockpiled as part of its reserves.

According to the Financial Times (FT) on 28 (local time), Tether had secured $13.4 billion worth of gold as of the end of the third quarter last year as part of its reserves. Based on the then price ($3,858 per troy ounce), this corresponds to about 108 tonnes of gold.

Gold prices have climbed sharply since the fourth quarter, recently surging to a record high of $5,264. The value of the 108 tonnes of gold held by Tether at that time now stands at about $18.2 billion. Riding the rise in gold prices, it has earned $4.8 billion over the past four months.

The increase in the value of gold is effectively profit that Tether pockets in full, since if stablecoin holders request redemption, the issuer only needs to repay them in dollars.

That is not all. Tether also purchased an additional 27 tonnes of gold in the fourth quarter last year. BlockBeats reported that “the value of the newly added gold holdings (in Q4) has risen by at least $700 million or more so far this year.”

The value of Tether’s gold stockpile is estimated at around $24 billion. By holdings alone, that is more than the Bank of Korea and roughly on par with the Qatar Central Bank.

Meanwhile, Tether CEO Paolo Ardoino has said recently that the company is buying 1–2 tonnes of gold every week. Ardoino said he expects the purchases to continue for the coming months.