Analyst Commends Tether’s Move on a Gold-Backed Stablecoin

In a recent tweet, prominent crypto analyst Willy Woo praised Tether’s latest innovation, aUSDT, a gold-backed stablecoin. He described it as a “genius business idea” by Tether. Woo highlighted the financial advantages of Tether’s new approach, stating that instead of issuing USDT and earning the yield from T-Bills, Tether can now issue aUSDT, earning gains from gold. Over the long term, gold has historically provided an 8% return compared to T-Bills’ 0-5%.

Given Tether is building a sizeable BTC treasury, I would not be surprised in a future where they issue bUSDT, backed by Bitcoin.

Doesn't make sense right now given the bear market drawdowns, but in a future cycle where BTC is bigger and less volatile it could happen.

— Willy Woo (@woonomic) June 18, 2024

Woo speculated on the future potential for Tether to issue a Bitcoin-backed stablecoin, bUSDT. He acknowledged that while such a move might not make sense currently due to bear market volatility, it could be viable in a future cycle where Bitcoin is more stable and widely adopted.

Addressing Stability Concerns

In his tweet, Woo addressed concerns about the stability of the new stablecoin, comparing it to the ill-fated Terra/Luna project. He emphasized that unlike Terra/Luna, which lacked substantial income, Tether boasts a significant $5.5 billion in annual revenue. This financial stability, he argued, provides Tether with ample time to accumulate more gold and ensure the success of aUSDT.

Woo’s comments came in response to a tweet by Tether’s CEO announcing the launch of aUSDT, the first Tethered asset. The CEO described aUSDT as a synthetic dollar over-collateralized by Tether Gold (XAUt) and introduced Alloy by Tether, an open platform for creating collateralized synthetic digital assets. This platform will soon be part of Tether’s new digital assets tokenization platform, set to launch later this year.