Cryptocurrency exchange Bybit has launched an income-producing tokenized gold product that allows users to earn interest on Tether Gold (XAUT), the latest participant in a broader project to transform traditionally non-income-producing assets into income-generating instruments.
The product is designed to transform tokenized gold – typically a passive store of value – into income-producing assets 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.
Bybit said the offering is part of a broader expansion into tokenized real assets (RWA) as it goes beyond established cryptocurrency trading products.
While monetizing tokenized assets is nothing modern, extending the model to gold is gaining traction across the industry, underscoring efforts to further financialize real-world assets on blockchain rails.
Earlier this week, tokenization platform Theo unveiled a $100 million structured investment vehicle backing the gold-linked, income-producing stablecoin thUSD. This model involves purchasing tokenized gold while hedging price risk by shorting gold futures contracts, and its goal is to generate returns from spreads in the financing and derivatives markets, rather than direct price movements.
Related: Tether expands USDT, Tether Gold support in Opera’s MiniPay wallet
Gold is showing extreme volatility after hitting record highs
Following a historic rally that pushed gold prices above $5,500 per troy ounce, the yellow metal has experienced high volatility in recent months, reflecting the changing macro backdrop.
While gold is widely seen as a risk hedge, especially during geopolitical shocks such as oil at $100 a barrel and the ongoing war in Iran, prices are down about $1,000 from their highs. The decline comes as investors retreat from expectations of Federal Reserve interest rate cuts, while real yields and a stronger U.S. dollar fall in the metal.
Analysts also note crowded positioning. In January, gold was near its peak, according to a global survey by fund manager Bank of America identified long gold as the most crowded trade in the markets.
According to. gold’s premium to its long-term trend has also reached its highest level since 1980 Bloomberg.
Nevertheless, tokenized goods continue to gain popularity. Cointelegraph reported that the market exceeded $6 billion in February, driven mainly by a historic enhance in the price of gold.
Related: Tokenized gold drives weekend price signals while CME futures are closed
