What to know:
- Bybit launches yield-bearing XAUT product, enabling passive income without selling.
- Product supports Bybit expansion into tokenized real-world assets beyond trading.
- Gold volatility rises as the tokenized commodities market surpasses $6B in February.
Crypto exchange Bybit has introduced a new income-bearing asset based on tokenized gold, which enables users to earn income on Tether Gold (XAUT). This new asset allows users to convert gold holdings into an income-bearing asset while maintaining their exposure to the prices of gold.
According to the announcement, the company said that the products use XAUT, which is the largest tokenized gold asset available on the market. Users can now earn income on their holdings without having to sell them.
Bybit has stated that the launch of the new asset supports its strategy for expanding its business beyond traditional trading services by entering the space for tokenized real-world assets.
Bybit Expands Gold Yield Strategy
Tokenized gold has traditionally been a store of value. It has not provided any yield to its holders. This new model will do so by including the yield aspect in the asset.
The industry seems to be going in this direction. There are attempts to earn yields from tokenized commodities. This is a reflection of the increasing popularity of blockchain-based financial instruments.
Earlier this week, a $100 million structured facility was introduced by Theo. There is a gold-linked stablecoin called thUSD, which is offered by the platform. Tokenized gold and hedging are included in the model.
Theo’s strategy includes the purchase of tokenized gold and shorting of futures. This strategy reduces price risk. Returns are based on spreads in financing and derivatives markets.
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The price of gold has shown significant volatility in the past few months. In the past, the price of gold has risen to over $5,500 per troy ounce. This rise is a new high in the history of the metal’s price.
Gold Pullback Deepens as Macro Pressures Mount
Since then, the price of the metal has declined by about $1,000 from its peak. This decline has been caused by changes in macroeconomic expectations. There has been a decrease in investor bets on rate cuts by the Federal Reserve.
Higher real yields and a stronger dollar have been an added challenge. These are generally negative for gold. Market positioning has also played a role in the decline.
In January, a Bank of America survey shows gold as a crowded position. Gold is also well above its long-term trend. The gold price is at the highest premium since 1980, according to a report by Bloomberg.
Despite the volatility, the tokenized commodities are continuing to grow. It has crossed the $6 billion mark in February. Gold-backed assets are a key contributor of that expansion.
This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
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