Gabor Gurbacs, a well-known figure in the cryptocurrency sphere and the founder of PointsVille, has voiced his insights on the role of precious metals within Tether’s financial strategy. As he stated on May 12, 2023, Gurbacs, who also held the position of Director of Digital Assets Strategy at VanEck, referred to the stablecoin as a “precious metals powerhouse”.
According to Gurbacs, gold has gained significant importance for Tether Limited, the entity responsible for issuing USDT. With a hefty sum of $3.4 billion in reserves held in gold, the stablecoin has secured its status as a formidable force in the precious metals market.
Gurbacs pointed out that roughly $500 million backs the circulating supply of Tether Gold (XAUT), Tether’s flagship gold-pegged stablecoin. Consequently, the proportion of gold in USDT reserves surpasses that of Bitcoin (BTC) by a staggering 127%. Tether’s holdings of Bitcoin only amount to an equivalent of $1.5 billion. In Gurbacs’ view, this blend of gold and Bitcoin serves as a robust buffer against potential market disasters and unpredictable “Black Swan” events.
It’s worth noting that Gurbacs’ analysis of USDT’s strategy comes from an insider’s perspective, as he holds an advisory role within the company, as stated in his Twitter profile.
The Rise of Tether amid stablecoin crisis
Additionally, Gurbacs suggested that diversified portfolios could benefit from holding a 5-10% stake in gold, Bitcoin, and commodities. Historically, precious metals have exhibited the least volatility among investment assets available to retail and corporate investors.
USDT’s market capitalization appears to have made a strong recovery from the substantial losses triggered by the collapse of Terra (LUNA) a year ago. at the time of writing, The stablecoin’s market capitalization has climbed above $82 billion. This figure is inching closer to its all-time high, which stood at $83 billion.
