I thought crypto was the future? Stablecoin swapping US dollars for gold
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Wouldn’t people just see this as a form of diversification? They just have to back up their “liquidity”
Unlike regulated banks, the stablecoin companies (such as Tether) do not pay their depositors interest. The companies keep any profits for themselves.
So it’s a question whether Tether is buying gold to diversify their holdings (similar to a sovereign such as the U.S. or China – which would be interesting) or whether Tether is buying gold to speculate on the price rise while at the same time driving the price higher due to increased demand.
Gold does not increase "liquidity.” Stablecoin companies, by the GENIUS Act, have to hold enough dollars to redeem their stablecoins. Gold is not liquid – it has to be sold at the market price to obtain USDs. Only USDs are liquidity.
The price of gold has been volatile in the past. If Tether is using gold to diversify their holdings and the price drops the depositors could lose. There is no FDIC for stablecoins.
The chart shows the price of gold has a classic bubble shape in 2025.
https://goldprice.org/gold-price-history.html
Wendy
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Well that makes sense, thanks for that response.
