Is XAUt Rapidly Rising to Become the New Representative of Digital Gold?

Recently, Bloomberg pointed out in a cryptocurrency market analysis report that the growth momentum of USDt is strong and it is likely to surpass Ethereum to become the second-largest crypto asset by market capitalization. However, while USDt is receiving a lot of attention, other stablecoins issued by Tether have rarely attracted notice.

In addition to USDt, Tether has also issued stablecoins pegged to the Euro, Renminbi, and gold, namely EURt, CNHt, and XAUt. Among them, EURt and CNHt have relatively limited market capitalization and trading volume. However, XAUt, which was launched as a new product at the end of January this year, has performed remarkably.

Data shows that since XAUt was launched more than 4 months ago, its market capitalization has reached around 86 million USD, with a 24-hour trading volume exceeding 110,000 USD. It is currently listed on 5 trading platforms. The rapid growth of XAUt is mainly attributed to the demand for safe-haven assets brought about by the global economic crisis.

Each XAUt is backed by one ounce of physical gold, providing investors with a convenient channel for gold investment. Compared to traditional gold ETFs, XAUt does not require custody fees and supports physical gold redemption. In addition, XAUt can be split to six decimal places and supports 24-hour trading, which has driven its market capitalization to grow rapidly.

Currently, the trading of XAUt is mainly concentrated on three platforms: Delta Ex, FTX, and Bitfinex, focusing on derivatives trading. These platforms offer a variety of trading products for XAUt, including perpetual contracts and leveraged trading. In the future, some exchanges plan to introduce XAUt into the Lightning Network to further enhance trading efficiency.

Despite the excellent performance of XAUt, industry insiders generally believe that it is difficult to reach the market capitalization scale of USDt. The main reasons include: the inherent volatility of gold, the issuance and management of XAUt being more complex than fiat stablecoins, and USDt having already become the primary medium for cryptocurrency trading.

The future development of XAUt still faces some challenges, such as the potential impact of gold supply shortages on its reserve management. At the same time, the competition in the gold-backed stablecoin market is also quite fierce, with competitors like PAX Gold leading XAUt in certain aspects.

Overall, XAUt, as a representative of "digital gold", shows strong growth potential in the current economic environment. However, whether it can continue to maintain rapid growth and occupy an important position in the stablecoin market still needs to be tested by time.