Tether, the company behind the largest stablecoin USDT, is following in the footsteps of MicroStrategy by purchasing BTC for its reserves. The stablecoin issuer plans to enhance its reserves with the help of Bitcoin.
In an announcement on May 17, Tether revealed that they plan to invest a portion of their profits into BTC on a monthly basis. The company stated that they will "regularly allocate up to 15% of its profits to buying Bitcoin."
The announcement came within a week of the company's quarterly financial report, in which the stablecoin issuer reported a net profit of $1.5 billion.
According to a statement from the company, Tether will self-manage all of its Bitcoin holdings. By the end of the first quarter of 2023, it held $1.5 billion worth of Bitcoin, accounting for about 2% of its total reserves. 85% of its total reserves are in cash, cash equivalents, and other short-term deposits, primarily in commercial paper.
Tether stated that BTC is a clear choice as the leading cryptocurrency has proven to be a long-term store of value. The stablecoin issuer cited Bitcoin's massive price increase over the past decade and its resilience in the face of traditional financial failures as factors influencing this decision.
In a statement, Tether's CTO Paolo Ardoino said that the world's first and largest cryptocurrency is bolstered by its potential as an investment asset. He further stated that Bitcoin's limited supply, decentralized nature, and widespread adoption have positioned it as a "preferred choice for institutional and retail investors."
