Tether, the issuer of the world’s first stablecoin, USDT, announced a new strategy that will see the company use a portion of its profits to acquire Bitcoin for its stablecoin reserves. This decision marks a turning point in the approach of management of company reserves.
In recent statementTether has proclaimed that it will regularly affect up to 15% of net profits made from investments for the purchase of Bitcoin, thus adding to its reserve surplus. Notably, the company will eliminate unrealized gains on the prices of its reserve assets and will itself take custody of the Bitcoineliminating the involvement of third parties.
Bitcoin: A resilient asset for portfolio enhancement
This movement follows the recent revelation of Tether that she currently owns $1.5 billion in Bitcoin And $3.4 billion in goldin addition to cash and cash equivalents such as obligations of the US Treasury, which represent 85% of its reserves. The company’s USDT, the largest stablecoin in circulation with a market capitalization of $82 billion, is backed by these reserves.
Tether’s strategy of investing in Bitcoin aims to build up its reserves while capitalizing on the cryptocurrency price appreciation potential. According Paolo Ardoinothe chief technology officer of Tether
Bitcoin has consistently proven its resilience and emerged as a long-term store of value with substantial growth potential.
Paolo Ardoino, CTO of Tether
The company’s investment in Bitcoin aligns with this transformative technology, enhancing its portfolio performance.
Tether plans to use exclusively tangible gains of its operations for its Bitcoin purchase plan. These gains are the difference between the purchase price and the net proceeds from an asset sale or, in the case of maturing assets such as treasury bills, between the purchase price and the amount repaid.
In addition to Bitcoin, Tether also invests in developing communications systems, energy, and Bitcoin mining infrastructure, further diversifying its investment portfolio.
Tether: The titan facing the FUD
Despite criticism of its reserve transparency and controversial investment decisions, Tether demonstrated its resilience in the face of market upheavals. His stablecoin USDTappeared as a refuge in March during the regional banking crisis in the United States which temporarily hit USDC from Circle, the second-largest stablecoin. The sudden debacle of Silicon Valley Bank (SVB) left some USDC cash reserves frozen in the bank for a weekend, and several stablecoins temporarily lost parity with the dollar as a result.
Tether has been successful in maintaining price stability thanks to its supposed disconnection from US banks, being incorporated in the British Virgin Islands and Hong Kong. The circulation of USDT is up 24% this yearwhile most of its competitors suffered significant cash outflows.
Tether will continue to adhere to rigorous risk management practices to ensure the stability and security of its operations. The firm remains steadfast in its commitment to maintaining the stability of its flagship stablecoin, Tether (USD₮), while exploring innovative opportunities in the cryptocurrency landscape. assets ever-changing digital.
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