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Physical Assets Go Digital: Tether Gold & Institutional Crypto Adoption
Despite Bitcoin’s characterization as “digital gold,” a tokenized version offering direct exposure to physical gold is gaining significant traction.
Tether Gold Reserves Soar Amid Gold Demand
By the end of Q2 2025, Tether Gold (XAUt), the tokenized gold asset from stablecoin provider Tether, was backed by 7.66 tons of physical gold, up significantly from previous attestations. This reserve supports over 259,000 XAUt tokens in circulation, resulting in a market value exceeding $800 million.
The growth reflects a broader surge in demand for physical gold, driven by renewed inflation concerns and uncertainty stemming from US trade policies.
Gold Demand Surges Across the Board, Including Central Banks
Tether Gold’s reserves and the performance of XAUt (up 40% YoY) signal growing investor appetite, often cited as a hedge against currency devaluation and inflation.
According to the World Gold Council, central banks significantly bolstered their gold reserves in 2024, adding over 1,000 metric tons and marking three consecutive years of exceeding this threshold.
Twenty One Capital Doubles Down On Bitcoin
Institutional interest in Bitcoin is also evident. Cantor Fitzgerald-backed Bitcoin treasury firm Twenty One Capital recently announced it has received an additional 5,800 BTC from Tether.
This brings its total holdings to approximately 43,500 BTC, surpassing initial projections by about 1,500 BTC. At prevailing prices, these holdings represent over $5.1 billion.
Avalanche Secures Real-World Asset Capital Injection
Avalanche has marked a significant milestone in its real-world asset (RWA) ecosystem with a $250 million capital injection. This funding is facilitated by Grove (an institutional credit protocol incubated by Sky/formerly MakerDAO), in partnership with Centrifuge.
The funds will be allocated to two Janus Henderson investment products on Avalanche: the Anemoy Treasury Fund (exposing investors to short-term US T-bills) and the Anemoy AAA CLO Fund (offering tokenized access to collateralized loan obligations). This move highlights Avalanche’s growing RWA momentum as competitors like Ethereum face increased competition in this sector.
SEC Approval Streamlines US Crypto ETF Operations
The US Securities and Exchange Commission recently approved changes allowing for in-kind creations and redemptions of Bitcoin and Ether spot ETFs. This update enables fund managers to exchange ETF shares directly for the underlying crypto assets, simplifying operations.
SEC Chairman Paul Atkins stated the move creates a “fit-for-purpose regulatory framework” that enhances the “cost-effectiveness and efficiency” of crypto ETFs.
The impact is notable: while Bitcoin ETFs launched in late 2024 have seen substantial inflows, Ethereum ETFs are accelerating rapidly. For instance, BlackRock’s iShares Ethereum ETF surpassed $10 billion in assets recently, achieving the third-fastest growth pace in US ETF history.
