Tether Holdings SA and a financial services firm tied to one of the cryptocurrency industry's largest hardware manufacturers are seeking to raise at least $200 million for a publicly traded vehicle designed to accumulate digital tokens backed by physical gold bars. The effort would deepen business relationships between Tether, which issues the world's most widely used stablecoin, and Antalpha Platform Holding, a company that works closely with mining operations and maintains strong ties to Bitmain Technologies Ltd.
What to Know:
- Tether and Antalpha Platform Holding are negotiating with potential investors to fund a digital-asset treasury company that would purchase XAUt, Tether's gold-backed token with a current market capitalization of $1.5 billion.
- The proposed vehicle would strengthen connections between Tether and Bitmain, the Beijing-based firm that supplies roughly 82% of the world's cryptocurrency mining equipment according to University of Cambridge research.
- Cohen & Co. is serving as the lead financial advisor on the fundraising effort, which would create another investment option in the growing market for tokenized commodities.
The Deal and Its Players
Antalpha Platform Holding, which provides financial services to cryptocurrency mining companies, is collaborating with Tether on the capital raise. People familiar with the discussions said the companies are targeting institutional and retail investors who want exposure to gold through blockchain-based assets. They requested anonymity because the negotiations remain confidential.
The two companies already work together on Tether Gold, the existing product that underpins the proposed treasury vehicle. Each XAUt token represents ownership of one troy ounce of physical gold stored in a Swiss vault.
Tether has built the token into a $1.5 billion business since launching the product.
Bitmain's connection to the deal runs through its relationship with Antalpha. The hardware manufacturer controls the majority of the global market for specialized computers that validate cryptocurrency transactions.
University of Cambridge Judge Business School researchers found in April that Bitmain equipment accounts for 82% of the machines used in crypto mining operations worldwide.
Tether's primary business involves issuing USDT, a stablecoin pegged to the U.S. dollar that serves as the largest such token by market value. The company has expanded into gold-backed tokens as part of a broader strategy to offer assets tied to traditional commodities. Cohen & Co., the investment banking firm advising on the transaction, declined to comment on the capital raise.
Understanding Tokenized Assets and Industry Dynamics
Stablecoins are digital tokens designed to maintain a fixed value by holding reserves of traditional currencies or other assets. USDT holds dollar-denominated assets to back each token in circulation. Tokenized gold works similarly, with companies holding physical metal to support digital representations of ownership.
The cryptocurrency mining industry relies on specialized hardware called application-specific integrated circuits. These machines perform the complex calculations required to validate transactions on blockchain networks. Bitmain emerged as the dominant supplier of this equipment.
Digital-asset treasury companies operate as publicly traded vehicles that hold cryptocurrency or related tokens. Investors can gain exposure to these assets without directly purchasing or storing them.
The structure appeals to institutions and individuals who want simplified access to digital markets.
Market conditions have created interest in gold-backed tokens as alternatives to traditional bullion ownership. The digital format allows for easier trading and transfer compared to physical gold. Custody costs and security concerns associated with storing metal bars do not apply to tokenized versions.
Final Thoughts
The fundraising effort represents an expansion of existing partnerships between major cryptocurrency industry players. Success would provide Tether with additional distribution channels for its gold token while giving Antalpha's investor network access to a new product category. The companies have not disclosed a timeline for completing the capital raise or launching the public vehicle.