- May 17, 2023
- Posted by: admin
- Category: BitCoin, Blockchain, Cryptocurrency, Investments
Stablecoin issuer Tether (USDT) said it would use 15% of its net realized operating profits to purchase Bitcoin (BTC).
In a May 17 company statement, the stablecoin issuer said it would self-custody the purchased BTC — adding that its purchase “will focus exclusively on utilizing realized profits from its investment strategy, disregarding unrealized capital gains generated by price increases.”
Tether said its BTC purchase is part of efforts to diversify its reserves. The company’s quarterly attestation showed that it held $1.5 billion of its reserves in the flagship digital asset. The stablecoin firm also had a substantial amount of gold and 85% of its reserve in cash, cash equivalents, and other short-term deposits.
“Tether’s purchase of BTC is part of its conservative and prudent approach to investment decisions aimed at strengthening, increasing, and diversifying its reserves.”
According to its statement, the firm anticipates that its regular BTC purchase would not “exceed the Shareholder Capital Cushion.”
Tether’s CTO Paolo Ardoino said:
“Our investment in Bitcoin is not only a way to enhance the performance of our portfolio, but it is also a method of aligning ourselves with a transformative technology that has the potential to reshape the way we conduct business and live our lives.”
Why Tether is making the Bitcoin bet
In a long-form Twitter post, Ardoino explained that the firm chose BTC because it “is the epitome of a sound and secure monetary system with its decentralized nature and scarcity.”
The firm corroborated this view in its statement. Tether said Bitcoin had demonstrated its investment potential with a track record of impressive returns over the past decade.
The firm added that its growing recognition and increased adoption by financial institutions had cemented its position as a critical component in diversified investment portfolios.
Tether’s USDT is the largest stablecoin by market cap. The stablecoin’s circulating supply sits at $82.86 billion as of press time, according to CryptoSlate data.
The post Tether USDT to strengthen reserves with Bitcoin purchase appeared first on CryptoSlate.
