Tether, the issuer of the globe’s largest stablecoin by market capitalization, continues its purchasing spree with its 32% stake acquisition in Canada’s public gold royalty entity Elemental Altus Royalties.
Tether Investments announced on Thursday the purchase of 78,421,780 common shares of Elemental (ELE) from La Mancha Investments, accounting for 31.9% of Elemental’s issued and outstanding shares.
The transaction, finalized on Tuesday, was executed at a price of $1.55 Canadian dollars ($1.14) per share, according to an announcement by Elemental, totaling approximately $89.4 million.
This investment signifies a significant milestone in Tether’s strategy to “integrate long-term, stable assets such as gold and Bitcoin” into its ecosystem, serving both as a hedge and as part of its commitment to constructing a resilient digital economy infrastructure, as stated by the stablecoin issuer.
Access to gold without mining hazards
By acquiring shares in ELE, seeks diversified access to global gold production via a royalty and streaming model, which circumvents the direct operational hazards of gold mining.
“This model aligns with Tether’s inclination for strategic, low-risk exposure to real-world assets that can improve the transparency and stability of digital financial products,” Tether noted.
CEO Paolo Ardoino emphasized the firm’s increasing investments in gold and Bitcoin, reflecting its “forward-looking strategy to create a more durable and transparent financial system.” He commented:
“Just as Bitcoin serves as the ultimate decentralized safeguard against monetary inflation, gold remains a time-proven store of value.”
“This is not merely about investment — it’s about constructing financial infrastructure for the next century,” Ardoino said.
Repercussions for Tether Gold
In addition to guarding against inflation, Tether’s involvement in a diversified gold royalties portfolio through Elemental enables the stablecoin issuer to bolster the support of its ecosystem and promote its gold-backed stablecoin Gold, or XAUt (XAUT).
The announcement also suggests more commodity-backed digital assets planned by Tether in the future utilizing its newfound exposure.
Since its launch in 2020, Tether’s XAUt stablecoin has emerged as the largest gold-backed cryptocurrency on the market, attaining a market cap of $854 million in April, as per CoinGecko data.
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XAUt’s ascent occurred amid the remarkable rise of gold over the past year, with spot gold prices surging around 30% year-to-date and peaking at $3,500 in April. Gold prices have experienced a slight decline since then, dropping to $3,388 at the time of writing, according to TradingView.
Tether’s ongoing purchasing spree
Tether’s stake acquisition of Elemental Altus Royalties marks yet another investment by the stablecoin issuer following the company recording a historic profit of $13 billion last year and officially expanding beyond stablecoins in April 2024.
In May, purchased $458.7 million worth of Bitcoin (BTC) for Twenty One Capital, a Bitcoin investment firm it supports that is awaiting the finalization of a Special Purpose Acquisition Company merger with Cantor Equity Partners.
Tether subsequently transferred another $3.9 billion in BTC to Twenty One Capital in early June, making it the third-largest corporate BTC holder after Strategy and MARA.
Tether also previously acquired a 30% stake in the Italian media firm Be Water in March, invested in the Juventus football club, and supported the self-custodial crypto wallet Zengo in February.
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