When Crypto giants turn to buy gold: How Tether is rewriting the logic of capital hedging?

The crypto market is experiencing a silent capital migration. The leading stablecoin Tether has accumulated 116 tons of physical gold, becoming one of the largest non-central bank gold holders worldwide. The implications behind this number are far deeper than surface level—this is not merely a change in investment preferences, but a signal that the entire crypto capital is shifting massively toward safe-haven assets.

The Real Story Behind Bitcoin’s Pullback

Bitcoin has fallen from its October high of $125,000 to the current $87.42K, with the market attributing the decline to changes in funds related to the US Bitcoin ETF. Monitoring shows recent ETF net redemptions exceeding $2 billion, indicating that institutional investors are actively adjusting their positions. Meanwhile, on-chain data reveals that long-term holders are accelerating profit-taking and withdrawing coins from exchanges, forming a rare synchronized reduction in holdings since 2022.

This adjustment is driven by concerns over US interest rates and economic outlook, as well as a broader shift of some long-term capital away from highly volatile assets toward instruments with stronger store-of-value capabilities. Gold has become the biggest beneficiary of this capital migration.

Why Is Tether Urgently Accumulating Gold?

Unlike typical crypto funds, Tether bears a critical responsibility: ensuring USDT never decouples. This mission requires its asset structure to be exceptionally stable—demanding large amounts of liquid assets, widely trusted reserves, and targets that do not fluctuate wildly like bonds or tech stocks. Gold meets all these criteria.

In recent years, Tether’s profits have surged to $7–9 billion annually, providing ample cash flow to continuously roll over and accumulate precious metals. The increase in gold reserves enhances USDT’s characteristics as a “super-sovereign currency,” often referred to as “quasi-central bank behavior” in the industry. The company has recently initiated metal trading recruitment and invested in the mining industry, indicating that gold strategy has become part of its medium- to long-term structural plan.

Three Layers of Capital Flows Are Forming a New Order

From a macro perspective, the crypto market is building a clear cross-market safe-haven chain, which can be broken down into three levels:

First Layer: ETF Institutional Level — US institutions’ risk aversion is rising, reducing crypto exposure through ETF redemptions.

Second Layer: Spot Trading Level — Retail investors and trading funds worldwide are sensing a shift, moving assets from exchange spot markets into stablecoins or OTC custody.

Third Layer: Stablecoin Capital Pool — Funds flowing into USDT are converted by Tether into part of its gold reserves, ultimately allowing crypto market liquidity to permeate into physical assets.

These three layers form a continuous capital flow: Institutional profit realization → Withdrawal from spot markets → Capital inflow into stablecoins → Stablecoin funds ultimately purchasing gold.

This explains why, even as crypto market cap declines, gold demand is rising against the trend. This cross-market linkage has historically received little attention, but now it is rapidly taking shape.

Investment Insights

The two markets—crypto and gold—with very different characteristics are showing unexpectedly close interconnection. This may represent a new normal in the global capital structure. For investors tracking both Bitcoin and gold trends, monitoring this cross-market capital flow will be one of the most critical signals in the coming year.