A few days ago, I was flooded with a hot news story, and I saw that some people didn’t understand the news well enough or even misunderstood it. Here is an explanation of the news for the veterans.
According to BlockBeats, USDT issuer Tether announced on May 17 that starting this month, it will regularly allocate up to 15% of realized net operating profits for the purchase of Bitcoin. Tether expects that its current and future Bitcoin holdings in its reserves will not exceed its shareholder capital buffer and will further strengthen and diversify its reserves. By the end of March 2023, Tether already held approximately $1.5 billion in Bitcoin in its reserves.
We can find that if TEDA's profit in the first quarter of 2023 is US$1.5 billion, based on this profit, assuming that future profits are roughly the same as the first quarter, then each quarter will have 15% of 1.5 billion, That is, $225 million was used to purchase Bitcoin.
Currently in the market, the U.S. government is the largest holder of Bitcoin, holding 18,134 Bitcoins and plans to sell them all within this year. At the current Bitcoin price of $28,000, TEDA’s expected buying orders this year of $675 million will exceed the U.S. government’s selling orders of $507 million.
TEDA's main way of making money is through issuing USDT. The current total amount of USDT is about 87 billion. People deposit real US dollars, and TEDA issues USDT that does not charge interest. Calculated based on a deposit interest rate of 5%, the annual deposit profit can reach US$4.35 billion. This makes TEDA a company with very strong profitability and minimal risks. In addition, TEDA has some other profit-making methods. For example, when the market has a negative view on USDT, TEDA can usually make profits from the market. Therefore, there is no doubt about TEDA's profitability, and it is expected that the profits in the following quarters will not be lower than those in the first quarter.
TEDA’s purchase of Bitcoin is also to ensure the stability of USDT. Due to TEDA's strong profitability, its purchase of Bitcoin is essentially different from Luna's purchase of Bitcoin as a guarantee for ust. The behavior of the two is completely different. Compared with Luna, TEDA is not a Ponzi air, and its profitability is real.
Do you guys understand?
