As of Jan 30, 12:00 UTC, traders are now ready to execute on margin using Tether Gold against pairings like tether’s native stablecoin (USDT), bitcoin (BTC) and therefore the U.S. dollar (USD).
These pairs can now be traded with initial equity of as low as 20 percent, giving traders a maximum of up to five times leverage, consistent with a handout by Bitfinex.
Margin trading enables traders to borrow funds to extend leverage, offering the potential for greater profits than in traditional trading. However, the potential for greater rewards also comes with amplified levels of risk.
Chief technology officer at Bitfinex, Paolo Ardoino said during a handout that the launch of margin trading on Tether Gold would leave a more sophisticated means of hedging exposure and managing risk.
“[Tether Gold] is timely given the growing interest in gold and other safe-haven assets amid the recent turmoil that we have seen in equity markets,” Ardoino said.
Tether Gold represents ownership of 1 ounce of physical gold on a London Good Delivery gold bar, with the gold backing each token stored during a Swiss vault. Holders of Tether Gold are going to be ready to avoid drawbacks related to physical gold, like high storage costs and limited accessibility.
As of today, Tether Gold is that the only product among its competition, like PAX Gold, that gives zero custody fees while retaining direct control over the physical gold storage.
Bitfinex, through a spokesperson, declined to mention whether the gold held in storage would be audited and people audits be made available.