ether to Allocate 15% of Profits Toward Bitcoin Acquisition
Tether, the company behind the world’s largest stablecoin USDT, has announced that it will allocate up to 15% of its profits to purchasing Bitcoin. The move, revealed in a company blog post, marks a strategic shift aimed at strengthening and diversifying the firm’s reserves.
According to Tether, the decision reflects growing confidence in Bitcoin’s role as a reliable store of value and a hedge against traditional financial volatility. The company’s latest attestation report also highlighted its current Bitcoin holdings, valued at approximately $1.5 billion.
A Strategic Bet on Bitcoin
“Starting this month, Tether will regularly allocate up to 15% of its net realized operating profits towards purchasing bitcoin,” the company stated. “Tether anticipates that its current and future BTC holdings will remain within the Shareholder Capital Cushion, further strengthening and diversifying the reserves.”
The report also revealed that Tether holds $3.39 billion in precious metals, showcasing a growing effort to balance its portfolio between fiat assets, commodities, and cryptocurrencies.
Paolo Ardoino, Tether’s Chief Technology Officer, emphasized Bitcoin’s long-term potential as a resilient investment asset.
“Bitcoin has continually proven its resilience and has emerged as a long-term store of value with substantial growth potential,” Ardoino said. “Its limited supply, decentralized nature, and widespread adoption have positioned it as a favored choice among institutional and retail investors alike.”
Reinforcing Confidence Through Diversification
The announcement comes as Tether’s flagship stablecoin, USDT, approaches its all-time high market capitalization. As of mid-May 2023, USDT’s market cap stands at $82.67 billion, just shy of its peak of $83.28 billion reached in May 2022.
By incorporating Bitcoin into its investment portfolio, Tether aims to enhance its financial resilience while capitalizing on BTC’s historical performance and global recognition.
The company stated, “By integrating Bitcoin into its investment strategy, Tether aims to capitalize on the digital asset’s potential growth, while leveraging its position as a trusted and reliable financial infrastructure provider.”
Broader Implications for the Crypto Market
Tether’s decision comes at a pivotal moment for the cryptocurrency sector, as institutions increasingly view Bitcoin as a legitimate asset for diversification. The move could also serve as a signal to other stablecoin issuers and financial entities considering exposure to Bitcoin.
The investment aligns with Tether’s broader commitment to maintaining transparency and stability in the digital asset ecosystem. With this new strategy, Tether joins a growing list of companies integrating Bitcoin into their balance sheets, reinforcing its role as both a financial hedge and a technological cornerstone of the global digital economy.
