Tether, the company behind the largest stablecoin in the cryptocurrency market USDT is now going to allocate up to 15% of its net realized operating profits towards purchasing Bitcoin (BTC). The information was published by Tether on Twitter a few hours ago. In that way, Tether will become another large company adding regular purchases of Bitcoin to their portfolio.
Tether to Purchase Bitcoin With Net Operating Profits
Tether is now going to be purchasing Bitcoin on a regular basis by allocating up to 15% of its net realised operating profits.
Tether
#Bitcoin
Starting this month, Tether will regularly allocate up to 15% of its net realized operating profits towards purchasing Bitcoin. These Bitcoin shall be considered on top of the minimum reserves assets that 100% back tether tokens.
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— Tether (@Tether_to) May 17, 2023
In a recently published press release, the company explained that they are working in order to improve their investment strategy and strengthen their reserves portfolio. As per the information shared by Tether, the current and future BTC holdings in its reserves will not exceed the Shareholder Capital Cushion. This is one of the strategies taken by Tether in order to diversify its reserves.
It is worth pointing out that the company already held Bitcoin in its reserves. As per the company, they hold approximately $1.5 billion in Bitcoin. Furthermore, the company decided not to rely on third-party custody solutions to protect its BTC holdings. Indeed, they are going to take possession of the private keys associated with all its Bitcoin holdings.
Moreover, the company decided to take a “conservative and prudent approach” to holding Bitcoin. Rather than speculating about BTC’s price, the goal is to increase, strengthen and diversify reserves. Additionally, they expect to enhance transparency and provide more information about the company’s capital allocation strategy.
About this decision, Paolo Ardoino, Tether’s CTO said:
“The decision to invest in Bitcoin, the world’s first and largest cryptocurrency, is underpinned by its strength and potential as an investment asset. Bitcoin has continually prove its resilience and has emerged as a long-term store of value with substantial growth potential.”
In 2023, Bitcoin has improved its market performance. It went from close to $16,000 in late 2022 to almost $30,000 a few weeks ago. According to data shared by CoinGecko, Bitcoin is now being traded at close to $27,250 and it has a market capitalization of $527 billion. In the future, we could see other companies entering the market by purchasing Bitcoin on a regular basis.
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