Antalpha sees $50 million paper profit evaporate on gold token XAUT

Antalpha, the Bitmain-backed crypto lending platform, has taken a significant hit on its investment in XAUT, the gold token from Tether. What began as an exceptionally lucrative position with an unrealised gain of nearly $100 million at its peak has now been halved. According to data from Arkham, the paper profit now stands at around $50 million.

How Antalpha built its XAUT position

Antalpha accumulated a total of $241 million in XAUT tokens, with an average purchase price of $3.693 per token. Tether’s gold token tracks the price of physical gold, meaning the platform indirectly took a large gold position. That strategy initially paid off: as the gold price rose, the unrealised gain climbed to nearly $100 million.

But market volatility has thrown a spanner in the works. The chart from Arkham shows that cumulative profit has been under pressure for some time. Daily fluctuations create an erratic pattern, and on balance some $50 million in paper profit has evaporated. The current unrealised gain thus still stands at around $50 million, but the decline is clearly visible.

What this says about Antalpha’s strategy

Antalpha’s position in XAUT is remarkably large for a crypto lending platform. This is not a small speculative bet, but a $241 million investment in a token linked to the gold price. That points to a deliberate choice to build exposure to gold via blockchain technology, possibly as a hedge against volatility in the crypto market.

Still, this example shows that even gold-linked tokens are not immune to price swings. Anyone wishing to view the full transaction history and portfolio of Antalpha can do so via the Arkham Explorer profile of Antalpha. The situation illustrates how even major players in the market face substantial declines in their paper profits, as the number of crypto investors is currently falling to its lowest point in six years.