I just read something interesting about what really happens beneath the surface of the gold market—and it’s quite concerning actually.

It’s about how almost everyone who thinks they own gold actually doesn’t hold any gold at all. We’re talking about paper gold, ETFs, IOUs—all claims on gold rather than the real stuff. Björn Schmidtke, who is behind Aurelion, points out that as much as 98% of all gold exposure actually consists of these paper titles. Investors think they’re buying physical gold through ETFs, but what they’re really doing is purchasing a piece of paper that says “we owe you gold.”

As long as everything remains normal, this system works fine. But imagine a crisis occurs—fiat currency collapses, panic ensues, and everyone suddenly wants their physical gold that they thought they owned. Then you have a problem. How do you prove ownership? Which gold bar is yours? You can’t just move billions worth of gold in a day. The premiums on physical gold spike while paper gold lags behind. Market chaos.

This is exactly what Schmidtke calls ‘seismic events.’ We’ve already seen it in the silver market—physical premiums explode while spot prices stay stable. He expects the same for gold when such a moment occurs.

Here’s where blockchain comes into play. Imagine being able to buy gold in a way that’s both fast and traceable. That’s what Tether Gold (XAUT) stands for. Each token is linked to a specific gold bar stored in a Swiss vault. Your ownership rights are recorded on the blockchain, so you know exactly what you own. No ambiguity, no logistical nightmares.

That’s why Aurelion has completely shifted its strategy. They now hold their gold reserves in XAUT instead of traditional paper gold. They currently own about 33,318 tokens, worth roughly $160 million. Schmidtke doesn’t see this as short-term speculation but as building long-term wealth. “How you own gold is just as important as owning gold,” he said.

The gold market has risen over 80% in the past 12 months—one of the best performers. But while everyone’s looking at that price increase, they’re missing the structural vulnerability. If you truly want to own physical gold, you need to know what you have. Blockchain solves that. XAUT gives you proof of ownership without having to store gold yourself. That’s a very different game than buying traditional paper gold.

By the way, Aurelion plans to raise more capital next year to further expand their gold reserves. An interesting move in this market.