Tether's Strategic Gold Purchases Highlight Diversification Efforts

Tether's significant gold acquisitions are a strategic treasury decision, according to Ivan Lee, trading director at QCP Group. According to PANews, Lee emphasized that this move is not a critique of the 'digital gold' narrative. Gold, as the most widely accepted non-sovereign reserve asset, complements Bitcoin by reducing its correlation with crypto liquidity cycles and hedging against regulatory shocks or sudden deleveraging, which are specific tail risks in the crypto market. Lee noted that Tether has accumulated approximately 130 tons of gold, with its purchases in the fourth quarter of last year accounting for 10% of the central banks' gold demand during the same period. Bitcoin behaves as a high-beta risk asset during tightening periods and exhibits gold-like properties during monetary expansion phases. Investors can balance both assets: gold to hedge against short-term crises and liquidity pressures, and Bitcoin to hedge against long-term policy risks and currency devaluation. However, the allocation size and risk control should be set according to their respective drawdown characteristics.