Tether announced a change in investment strategy and the decision to increase the share of the first cryptocurrency in providing reserves
Tether has decided to regularly buy millions of dollars worth of Bitcoins. The company announced that it would spend up to 15% of its realized operating income on buying Bitcoins. The company may have already spent $222 million to buy its first cryptocurrency. This was calculated by CNBC, based on Tether’s first-quarter statements.
The issuer of Tether (USDT), the largest stablecoin by capitalization, announced a new investment strategy. Starting in May 2023, the company will begin regularly allocating a portion of its net realized operating income to buying Bitcoins.
According to Tether’s first-quarter report, Tether had about $1.5 billion in Bitcoin in its reserves at the end of March. And that was about 2% of their total holdings. About 85% of the collateral was held in cash and cash equivalents. And it was also placed in short-term deposits – mostly in U.S. Treasury bills.
Although many institutional investors deposit their Bitcoins with third parties. Then Tether takes a “not your keys, not your Bitcoin” stance. And it keeps the assets on its own, the company said in a press release.
“Bitcoin has consistently proven to be sustainable and has evolved into a long-term savings vehicle with significant growth potential. Its limited supply, decentralized nature and widespread adoption have made Bitcoin the preferred choice among both institutional and retail investors,” said Tether CTO Paolo Ardoino.
Investing in Bitcoin, he said, is one way to boost Tether’s portfolio performance. And the company expects the BTC exchange rate to rise.
Tether will also invest in building infrastructure for Bitcoin mining and exploring other “innovative opportunities in the ever-evolving landscape of digital assets.”
Our experts note that in the fourth quarter of 2022, Tether posted a profit of $700 million. The USDT issuer closed the first quarter of this year with a profit of $1.48 billion. The company noted that this is a “huge success.” And they said they already have an “extremely positive outlook” for the second quarter of this year as well.