Tether has decided to regularly buy millions of dollars worth of bitcoins
Tether, the issuer of the USDT stablecoin, has decided to regularly buy millions of dollars worth of bitcoins
The issuer of USDT, the largest stablecoin, announced a change in investment strategy and a decision to increase the first cryptocurrency's share of reserve collateral
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 Bitcoin purchases. The company may have already spent $222 million to buy its first cryptocurrency, CNBC estimated, 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, which was about 2% of its total. About 85% of the collateral was held in cash and cash equivalents and was also held in short-term deposits - mostly U.S. Treasury bills.
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While many institutional investors deposit their bitcoins with third parties, Tether maintains a "not your keys, not your bitcoin" stance and stores the assets itself, 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.
Investing in Bitcoin is one-way Tether's portfolio can improve its performance, the company expects BTC to grow.
Tether will also invest in building bitcoin mining infrastructure and exploring other "innovative opportunities in the ever-evolving landscape of digital assets."
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 said that it already has an "extremely positive outlook" for the second quarter of this year as well.
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