Tether’s Strategic Diversification: Investing in Gold Royalties
Tether, the well-known issuer of the USDT stablecoin, has recently made headlines by taking significant steps to diversify its investment portfolio beyond its primary stablecoin issuance business. On June 12, the company announced the acquisition of a substantial equity stake in Elemental Altus Royalties, a firm specializing in gold royalties. This strategic move is part of Tether’s long-term vision to bolster its asset reserves and enhance its resilience in the financial landscape.
Key Acquisition Details
On June 10, Tether secured 78.4 million common shares from La Mancha Investments, representing approximately 31.9% of Elemental Altus’s outstanding shares. While the specific purchase price was not disclosed, estimates based on Elemental’s recent share price of 1.5 Canadian dollars (approximately $1.15) suggest that the stake is valued at nearly $90 million. This remarkable investment aids in solidifying Tether’s footprint within the gold market and offers a unique pathway to participate in the royalties generated from gold production.
Future Opportunities with Elemental
In addition to the initial acquisition, Tether has engaged in an option agreement with AlphaStream Limited that may allow it to acquire an additional 34.4 million shares. However, this option cannot be exercised until after October 29, 2025, unless otherwise approved by the Elemental board. Should Tether choose to exercise this option, its total holdings could approach 48% of Elemental’s total equity. The potential for increased involvement extends beyond mere equity; Tether has expressed interest in collaborating with Elemental’s leadership on future capital strategies and operational partnerships, contingent upon regulatory approvals.
Diversifying with Gold and Bitcoin
This investment aligns with Tether’s ongoing strategy to incorporate traditional assets into its reserves. Through Elemental’s royalty and streaming model, Tether gains exposure to gold production without the inherent risks associated with mining operations. Tether CEO Paolo Ardoino emphasized that this diversification not only strengthens Tether’s ecosystem but also prepares the company for future developments in commodity-backed digital assets. He stated, “Just as Bitcoin provides the ultimate decentralized hedge against monetary inflation, gold continues to be a time-tested store of value.”
Strengthening Asset Backing
Tether’s commitment to integrating gold and Bitcoin into its portfolio is driven by the need to mitigate macroeconomic risks while effectively utilizing profits. The company currently holds over 100,000 Bitcoin and nearly 80 tons of physical gold, consolidating its position as a significant player in the digital assets market. Ardoino further elaborated, “We believe in financial systems that are backed by real assets, not just promises… tangible assets like Bitcoin and gold will underpin the most durable forms of digital value.” This perspective reinforces Tether’s objective to provide stability and security in an ever-evolving financial environment.
Conclusion: A Forward-Thinking Investment Strategy
Tether’s strategic acquisition of a stake in Elemental Altus Royalties marks a noteworthy chapter in the company’s quest to diversify its investments. By proactively engaging with traditional assets such as gold, Tether is not only aiming to enhance its asset backing but also preparing for a future defined by commodity-backed digital currencies. As Tether continues to innovate and expand its portfolio, this foundational move signifies a broader trend in the financial industry—one that values real assets as vital components of a sustainable economic framework.
