The issuer of the largest listed stablecoin has declared that starting in May 2023, it will allocate a significant portion of its profits to Bitcoin purchases. By doing so, it will build up additional financial reserves by feeding its treasury.
Up to 15% of profits will be converted into BTC
Representatives of Tether, the company responsible for the largest stablecoin – USDT, have decided to change the way they manage their assets. This is because they plan to strengthen their resources using the potential of Bitcoin (BTC) and abandon US debt securities.
In a fresh announcement on May 17, Tether revealed its plans to invest in BTC on a regular basis. The company said it would “systematically allocate up to 15% of its realized net operating profits to the purchase of Bitcoin.”
The announcement came shortly after the release of its quarterly financial report, in which the stablecoin issuer reported a profit of $1.5 billion.
According to a statement provided by the company, Tether intends to store all purchased Bitcoins in its own depository. At the end of the first quarter of 2023, the company held $1.5 billion in BTC, which accounted for about 2% of its total reserves. The remaining 85% of the reserves were held in cash, cash equivalents and other short-term deposits, which were mainly US Treasury bonds.
Bitcoin the best market choice
Tether, fully confident in its choice, believes that Bitcoin is the obvious and only right option. The market-leading cryptocurrency has proven its value as a long-term component of an investment portfolio. The stablecoin issuer referred to the huge increase in the price of BTC over the past decade and its resilience to traditional financial setbacks.
Paolo Ardoino, chief technology officer at Tether, issued a statement emphasizing that the world’s first and largest cryptocurrency is building on its potential as a valuable investment asset. Additionally, Bitcoin’s limited supply, decentralized nature and widespread adoption have made it “the preferred choice for both institutional and retail investors.”
Tether an inspiration for more entities?
Pointing to Bitcoin’s advantages as a store of value, Tether argues that this cryptocurrency is not only a financial tool, but also a reflection of the changing way society views and uses money. Its popularity and wide-scale acceptance are a confirmation of the evolution of the financial system.
Tether’s decision to invest in Bitcoin and increase its reserves reflects the consciousness of a stablecoin issuer that is learning from current trends and trying to adapt to changing market conditions. In this way, the company is at the forefront of cryptocurrency innovation and inspires others to take similar steps.
