Stablecoins, particularly Tether, may be a significant buyer of gold today and could be helping power the metal’s rally above $4,100. At the same time, headline crypto liquidation numbers (reported at $19.16 billion) may materially understate actual forced selling, according to market observers.
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Stablecoins (Tether) are likely contributing to the gold rally by increasing demand for physical or paper gold.
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Reported crypto liquidations reached $19.16 billion on Oct. 10, but some analysts say true figures may be multiple times higher.
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Gold topped $4,100; XRP and other major altcoins suffered declines exceeding 50% during the sell‑off, per market data providers.
Stablecoins driving gold rally: Tether’s supply surge may be buying gold as prices top $4,100. Crypto liquidations are likely understated; COINOTAG explains.
Author: COINOTAG | Published: 2025-10-13 | Updated: 2025-10-13
Are stablecoins driving the gold rally?
Stablecoins may be driving the gold rally by acting as a liquidity bridge between crypto holders and traditional safe‑haven assets. Analysts and market participants, including Tom Lee, have pointed out that a rapid increase in Tether supply coincided with a sustained rise in gold prices above $4,100, suggesting demand flows from crypto into gold.
How could Tether and other stablecoins purchase gold?
Stablecoins can function as a near‑cash instrument for traders and institutions. When Tether (USDT) issuance expands, those coins provide an on‑ramp to markets where traders allocate into fiat‑priced assets like gold. Tom Lee remarked on CNBC that stablecoins “may be one of the largest buyers of gold today,” framing Tether as a “meeting ground” between Bitcoin and gold investors. Market data shows gold reached record levels above $4,100 around the same period as Tether’s supply growth, a temporal correlation that warrants monitoring.
Crypto liquidations are understated — how large was the sell‑off?
Publicly reported liquidation totals do capture a sizable forced deleveraging: CoinGlass reported $19.16 billion in liquidations on Oct. 10. However, Fundstrat analyst Tom Lee and other market commentators noted exchange constraints and reporting limitations that can undercount rapid, fragmented liquidations. For example, some platforms throttle or batch liquidation orders (Binance reportedly limits liquidation push frequency), which can mask actual trading velocity and aggregate sizes. If exchanges and liquidity providers are constrained, published snapshots may not fully reflect off‑exchange or staggered forced selling.
What the data and market structure tell us
CoinGlass data provides a headline figure ($19.16 billion) and token‑level breakdowns showing outsized losses for several altcoins—XRP declined more than 50% in the period reported by market trackers. Exchange mechanics matter: order rate limits, cross‑margin offsets and off‑exchange settlement can all compress visible liquidation volumes. Independent data providers, institutional desk reports and on‑the‑record commentary (CNBC, CoinGlass, COINOTAG, Fundstrat) consistently point to materially elevated stress during the sell‑off, even if the exact multiple of understatement is not precisely measurable.
Frequently Asked Questions
How much were crypto liquidations on Oct. 10 and why might that be an understatement?
CoinGlass reported $19.16 billion in liquidations on Oct. 10. Industry analysts, including Tom Lee, caution this may be understated due to exchange rate limits on liquidation frequency and off‑exchange forced selling; such frictions can fragment and delay visible liquidation counts, understating peak stress.
Did stablecoins actually buy gold, or is this a correlation?
Current evidence is correlation‑based: Tether’s rising supply aligns with the gold rally and market participants (Tom Lee) argue stablecoins are being used to buy gold. Direct, auditable chain‑to‑vault proof is limited in public data; however, transactional flows and timing support the hypothesis that stablecoins facilitated increased gold demand.
Key Takeaways
- Stablecoins and gold: Tether’s supply surge coincided with gold breaking past $4,100, suggesting stablecoins may be a meaningful liquidity source into gold.
- Liquidation reporting limits: CoinGlass reported $19.16 billion in liquidations on Oct. 10, but exchange mechanics like throttling can undercount true forced selling.
- Market implications: If stablecoins are absorbing crypto outflows into gold, that reconfigures risk transmission between digital assets and traditional safe havens; investors should monitor supply and flows.
Conclusion
This COINOTAG analysis highlights two concurrent developments: a notable expansion in Tether supply aligned with a record gold rally, and a major crypto liquidation event that may be understated by public metrics. While correlation does not prove causation, expert commentary (Tom Lee, Fundstrat) and data from market trackers (CoinGlass) point to systemic interactions between stablecoins, exchange microstructure (Binance order limits), and price discovery across asset classes. Market participants should watch stablecoin issuance, on‑chain flow patterns and exchange liquidation mechanics for early signals of cross‑market pressure. For continued coverage and data‑driven updates, follow COINOTAG’s reporting and scheduled updates.
Sources referenced (plain text): CNBC, CoinGlass, COINOTAG, Fundstrat, Binance, Tether. No external links provided per COINOTAG editorial policy.
