Tether plans to buy Bitcoin with its profits

The issuer of theUSDT will allocate up to 15% of its profits to thebuying Bitcoin. Tether already holds 1.5 billion dollars in BTC.

The company behind the world’s largest stablecoin, Tether, announced Wednesday that it wants to strengthen its reserves with bitcoins. It intends to invest regularly in the first crypto market.

Tether will regularly allocate up to 15 percent of its net realized operating profits to the purchase of Bitcoin,” reads a statement.

Earlier this month, the issuer of theUSDT announced net income of $1.48 billion in Q1 2023 with assets totaling $81.8 billion to $79.3 billion in liabilities.

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While the assets of Tether include primarily cash, U.S. Treasury bills and physical gold, the company also reported holding 1.5 billion in BTC as “excess reserves .

“Although these excess reserves are part of the equity, Tether prefers to ensure that its products stablecoins are as resilient as possible. Although banks can do fractional reserve, we believe this is not a viable strategy for a stablecoin, so it is crucial that Tether maintains a extra cushion to further protect its user base , explained Paolo Ardoino, the CTO of Tether, on Twitter.

According to the group’s subsidiary iFinex Based in the British Virgin Islands, Bitcoin has managed to establish itself as a “new” form of long-term store of value with substantial growth potential”.

Its limited supply, decentralized nature and widespread adoption have positioned Bitcoin as a preferred choice among institutional and retail investors,” Tether wrote.

The operator further plans to invest in building bitcoin mining infrastructure and communication systems based on its Holepunch technology.

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In recent months, theUSDT has widened the gap with the USDC. The market capitalization of Circle’s stable token has declined significantly following its depeg in March. The marketcap of the USDT now exceeds 82.5 billionnearly three times more than its main rival.

In Q4 2022, Tether revealed a net profit of $700 million for the first time. The firm began publishing quarterly reports last year after long being criticized for its lack of transparency.

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