Tether Gold (XAUT) is a synthetic asset that allows you to own part of a gold bar through the blockchain.
A synthetic asset is a digital asset that conveys ownership of a physical asset. The asset Tether Gold conveys ownership in is gold.
Each Tether Gold (XAUT) token represents one troy ounce of gold in a London Good Delivery Bar. Interestingly, Tether Gold was worth less than gold itself on 23 May 2022.
CoinMarketCap gave Tether Gold a Coin Price of $1,849.19 on 23 May 2022. In comparison, GoldPrice.org estimates a troy ounce of gold was trading at $1,853.37 on 23 May 2022. Thus, Mr. Market seems to prefer gold to Tether Gold.
What is Tether Gold (XAUT)?
Tether Gold (XAUT) is an ERC-20 token built on the Ethereum blockchain. Holders can transfer XAUT tokens to any blockchain address through a Tether wallet after purchase.
Each XAUT represents ownership of one fine troy ounce of physical gold in a specific gold bar. They claim users can verify the gold and the bar with a unique serial number. There is a lookup website that lets owners check the details of the gold bars.
The gold is held in the United Kingdom in a London Good Delivery gold bar. A London Good Delivery bar meets the standards set by the London Bullion Market Association (LBMA). That means the gold can be traded in the Loco London Market where precious metals trade directly between two partners. There is no custody fee for Tether Gold but TG Commodities charges fees on redemption.
How Does Tether Gold Work?
The gold is managed by a British company they call TG Commodities Limited. TG Commodities Limited can sell the gold for cash, minus fees, and ship the told to a location of the owner’s choice in Switzerland.
To buy Tether Gold (XAUt) you need a verified account with TG Commodities Limited. There is a minimum purchase price of 50 XAUt. I calculate the minimum purchase amount for Tether Gold (XAUt) was $90,966 on 17 May 2022.
They claim you can trade XAUt on exchanges in smaller fractions. Currently, Bitfinex, FTX, Celsius, BTSE, BigONE, gate.io, and Ledger exchanges are trading Tether Gold.
What Value does Tether Gold Have?
Mr. Market gives Tether Gold (XAUt) some value. For instance, CoinMarketCap named Tether Gold the 219th largest cryptocurrency with a Coin Price of $1,849.19 on 23 May 2022.
CoinMarketCap gave Tether Gold a $455.865 million Market Capitalization, a $456.117 million Fully Diluted Market Cap, and a 24-Hour Market Cap of $2.108 million on 23 May 2022. They base numbers on a Circulating Supply of 246,524 XAUT.
I consider Tether Gold (XAUt) a good digital asset for rich people who want to hold gold in Europe. In other words, a digital asset Auric Goldfinger could appreciate.
However, I don’t think Tether Gold will be a good investment for ordinary people. Goldbug millionaires on the other hand could love Tether Gold.