Macroscope | In the crypto vs gold struggle, new battle lines are being drawn

The finance world is in flux, with stablecoin issuer Tether investing heavily in the metal it has been trying to usurp as a primary means of exchange

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Gold jewellery is displayed in a window in New York on September 8. The price of gold is leaping to record highs nearly every day. Photo: AFP

Published: 4:30pm, 13 Sep 2025Updated: 4:31pm, 13 Sep 2025

At a time when cryptocurrencies are being promoted aggressively by none other than US President Donald Trump, among others, it is significant that the price of gold is leaping to record highs nearly every day. It is arguably even more significant that one leading cryptocurrency group, Tether, is investing heavily in gold, the same metal that cryptocurrency aspires to replace and which economist John Maynard Keynes once described as a “barbarous relic”.

These developments are symptomatic of growing disorder and instability in the global economic and monetary order. They also suggest cryptocurrency practitioners are resorting to similar tactics to those pioneered in Britain in the early 1970s by so-called asset strippers, who used synthetic wealth to acquire real assets.

One apparent way to get rich quick is to create and hype an asset – be it cryptocurrencies or glamour stocks – and then use the purchasing power these confer on holders to acquire “hard” assets, whether they are companies, real estate or, as is the case now, gold.

What is happening represents a further twist in the process. So-called stablecoins or tokens, among which Tether is a leader, have promoted their legitimacy as money on the grounds that they are backed by the US dollar holdings of their issuers. However, some fear the dollar is now on the skids and thus Tether, for one, is building up gold reserves.

The asset strippers used connections in the City of London and in government to promote their image as solid holding companies intent on unlocking value in sleepy companies. This boosted the value of their listed shares, which they then used as currency to finance the acquisition of other listed companies that possessed valuable real estate, which was duly sold at a huge profit.

This technique is somewhat analogous to that which is emerging now with cryptocurrencies. The difference is that, in the latter case, cryptocurrency issuers will be able to use the “gold-backed” and inflated value of their currencies to acquire hard assets.

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