27 tons of gold can't hold up, XAUT's market share drops from 60% to 50%, the tokenized gold market is about to change.

Tether’s big bet on gold is facing unexpected challenges. The stablecoin giant bought 27 tons of physical gold in Q4 2025, with total purchases exceeding those of many central banks throughout the year, yet watched as its XAUT share in the tokenized gold market rapidly declined from 60% in November to 50% in January. Meanwhile, new competitors like Pax Gold and Kinesis Gold are eating into the market share. This is not just a battle for market share but also a sign of divergence in a rapidly expanding market.

Expansion Logic Amid Gold-Hedging Boom

Why is Tether疯狂囤金

The background is clear: global gold prices surged 64% in 2025, continuing upward into 2026 with a cumulative increase of 17%, breaking the $5,000 mark for the first time. Driven by inflation pressures and geopolitical risks, safe-haven funds are flowing into gold continuously.

Tether seized this opportunity by continuously purchasing physical gold to strengthen the asset backing of XAUT. The logic is straightforward: each XAUT is backed 1:1 by physical gold, allowing investors to verify. Tether CEO Paolo Ardoino also explained— in an environment of increasing currency system volatility, XAUT aims to provide a more verifiable store of value.

This strategy has proven effective. XAUT’s scale jumped from $600 million at the end of 2025 to $1.8 billion, further rising to $2.24 billion in early 2026, a 26% increase just in January. The entire tokenized gold market is also expanding rapidly, surpassing $5.2 billion in size.

The Real Signal Behind Market Share Changes

But an interesting phenomenon has emerged: while the market is expanding and Tether’s absolute scale is growing, its market share is declining.

What does this change indicate? It’s not that Tether is declining; rather, the market is diversifying. Pax Gold’s market share is rapidly approaching 40%, and Kinesis has jumped from nearly zero to close to 8%, becoming a new force disrupting the landscape.

Why the Competitive Landscape is Changing

Tether’s Advantages and Constraints

On the surface, Tether has unbeatable backing: it is the largest stablecoin issuer globally, with protocol revenue reaching $5.2 billion in 2025, ranking first in the crypto industry. Having Tether’s support means liquidity is guaranteed, and ecosystem development is effortless.

But this advantage also brings hidden constraints. Tether’s centralized nature is obvious, and many investors are seeking more diversified options. Tokenized gold fundamentally addresses a trust issue: how do I know my gold is really there? When other options claiming to offer the same guarantees appear, competition naturally arises.

Where Do New Competitors Have Opportunities

The rise of Pax Gold and Kinesis is not accidental. These projects represent market demand for diversification:

• Transparency demands: Investors want to see different audit mechanisms and storage solutions
• Liquidity differences: Support varies across exchanges; some competitors may have better liquidity on certain platforms
• Trust diversification: Not putting all chips into one institution
• Innovative features: Some competitors may have differences in tokenomics or application scenarios

Key Variables for Future Trends

From the current landscape, this market is far from saturated. The $5.2 billion scale is still a drop in the bucket compared to the global gold market and safe-haven assets.

If macro uncertainties continue to push up physical gold prices, the tokenized gold market still has significant room to grow. But this space will no longer be monopolized by a single player.

For Tether, ongoing gold accumulation and buyback mechanisms indeed strengthen the underlying backing of XAUT. However, maintaining market share depends on three factors:

• Transparency: Timeliness and completeness of audit reports
• Liquidity: Richness of trading pairs and trading depth
• Trust: User confidence in the stability and compliance of the institution

On these three factors, Tether has a foundation but not an absolute advantage. Pax Gold may have better liquidity on certain exchanges, and Kinesis might have breakthroughs in innovative applications.

Summary

Tether’s 27 tons of gold are not bought in vain; they reinforce XAUT’s credibility as a safe-haven asset. But the fact that market share dropped from 60% to 50% indicates that the tokenized gold market has moved from “Tether dominance” to “multi-player competition.”

This may not be a bad thing for investors. Multiple reliable options mean a more mature market. For Tether, the challenge is how to continue expanding while strengthening transparency and liquidity advantages. The overall growth space is large enough to accommodate multiple players, but who will come out on top depends on long-term trust rather than short-term market share competition.