Tether, the issuer of the world’s largest stablecoin, has announced plans to allocate a significant portion of its profits to invest in bitcoin. This move comes as Tether aims to reinforce its position as a stablecoin leader and diversify its reserves away from U.S. government debt. The decision is fueled by Tether’s confidence in bitcoin’s potential and track record as a long-term store of value, showcasing remarkable growth over the past decade.
According to a recent statement by Tether, the company will gradually invest up to 15% of its profits in bitcoin, steadily increasing its holdings of the leading cryptocurrency. Notably, Tether intends to assume full custody of its bitcoin reserves, further solidifying its commitment to self-sufficiency and security. At the end of the first quarter, Tether already held $1.5 billion in bitcoin, representing approximately 2% of its total reserves.
While the majority of Tether’s reserves, around 85%, are currently held in cash, cash equivalents, and short-term deposits, predominantly in Treasury bills, the company recognizes the potential of bitcoin as an investment asset. By strategically embracing bitcoin, Tether seeks to enhance the performance of its portfolio while aligning itself with a transformative technology that has gained widespread adoption and disrupted traditional business practices.
Paolo Ardoino, the Chief Technology Officer of Tether, emphasized bitcoin’s resilience and its appeal to both institutional and retail investors. Ardoino cited bitcoin’s limited supply, decentralized nature, and impressive historical returns as key factors driving Tether’s decision. He expressed confidence that investing in bitcoin would not only strengthen Tether’s reserves but also contribute to reshaping the future of global commerce and everyday life.
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As the market leader, Tether’s USDT stablecoin boasts a supply of over 83 billion tokens, solidifying its dominance in the stablecoin sector. While other stablecoins have encountered challenges, Tether has consistently defied skeptics, maintaining stability throughout its existence. Given its financial success, Tether’s investment in bitcoin raises the question of whether it could play a role as a potential savior for the cryptocurrency giant, especially considering the substantial profits it has amassed.
The cryptocurrency community awaits Tether’s strategic moves with anticipation, as its decision to invest in bitcoin has the potential to reverberate throughout the crypto market. If successful, Tether’s alignment with bitcoin may further establish the cryptocurrency as a secure store of value and bolster Tether’s position as a leading stablecoin provider.
