Bybit launches yield-bearing tokenized gold, expanding RWA yield market

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 is designed to convert tokenized gold — typically a passive store of value — into a yield-bearing asset using XAUT, the largest tokenized gold product, the company announced Thursday. It allows holders to earn passive income while maintaining exposure to gold prices.

The market cap of Tether Gold reached nearly $3 billion earlier this month. Source: CoinMarketCap

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 financialize real-world assets on blockchain rails.

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.

Related: Tether expands support for USDT, Tether Gold in Operas MiniPay wallet

Gold sees extreme volatility after hitting record highs

After an 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 Americas global fund manager survey identified long gold as the most crowded trade in markets.

Spot gold prices. Source: Bloomberg

Golds 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 golds historic rally.