Cryptocurrency exchange Bybit has launched a yield-bearing tokenized gold product that lets users earn interest on Tether Gold (XAUT), the latest entrant into a broader push to turn traditionally non-yielding assets into income-generating instruments.
The product converts tokenized gold — typically a passive store of value — into a yield-generating asset using XAUT, the largest tokenized gold product, the company announced on Thursday. It allows holders to earn passive income while maintaining exposure to gold prices. However, yield-bearing structures may introduce additional counterparty or derivatives risk compared with holding spot-backed or physical gold.
Bybit said the offering is part of its broader expansion into tokenized real-world assets (RWAs), as it moves beyond traditional crypto trading products.
While earning yield on tokenized assets is not new, extending the model to gold is gaining traction across the industry, highlighting efforts to further expand financial use cases for real-world assets onchain.
Earlier this week, tokenization platform Theo unveiled a $100 million structured investment facility backing its gold-linked, yield-bearing stablecoin, thUSD. The model involves purchasing tokenized gold while hedging price risk by shorting gold futures, aiming to generate returns from financing and derivatives market spreads rather than outright price moves.
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Gold sees extreme volatility after hitting record highs
After a historic rally that pushed gold prices above $5,500 per troy ounce, the yellow metal has experienced sharp volatility in recent months, reflecting a shifting macro backdrop.
Although gold is widely viewed as a hedge against risk, particularly during geopolitical shocks such as $100-a-barrel oil and the ongoing Iran war, prices have fallen by roughly $1,000 from their peak. The decline comes as investors dial back expectations for Federal Reserve rate cuts, while rising real yields and a stronger US dollar weigh on the metal.
Analysts also point to crowded positioning. In January, as bullion was nearing its peak, Bank of America’s global fund manager survey identified long gold as the most crowded trade in markets.
Gold’s premium relative to its long-term trend also reached its highest level since 1980, according to Bloomberg.
Nevertheless, tokenized commodities continue to gain traction. Cointelegraph reported that the market surpassed $6 billion in February, driven largely by gold’s historic rally.
Related: Tokenized gold drives weekend price signals while CME futures are closed