Tether, the company behind the USDT stablecoin, has announced that it will use a portion of its profits to regularly buy bitcoin starting this month as part of a new investment strategy focused on bitcoin (BTC). bottom.
Add up to 15% of realized profits to Bitcoin purchases and add to reserves. It will not use a third-party custody service and will hold it in-house.
Last week, the company revealed that it holds $1.5 billion in Bitcoin and $3.4 billion in gold of its $82 billion USDT and other smaller stablecoin reserves. bottom. About 85% of the reserves are cash and cash equivalents such as US Treasuries, according to the Q1 2023 audit assurance report.
Investing in Bitcoin
Tether’s bitcoin purchase aims to strengthen and diversify its stablecoin reserves while capitalizing on price increases as an investment, according to a press release.
“Bitcoin continues to prove its resilience and has become a long-term store of value with substantial growth potential,” said Paolo Ardoino, chief technology officer of the company. said in the release.
“Investing in Bitcoin is not only a way to improve the performance of our portfolio, but also a way to work with transformative technology.”
“Only tangible gains from operations are considered,” he said, when buying bitcoin. In other words, it does not take into account unrealized gains on holding assets, and uses only realized gains from investments. The company focuses on telecommunications systems, energy and bitcoin mining infrastructure among its smaller investments.
Over the years, Tether has been criticized within the industry for its lack of transparency about its reserves and controversial investment behavior. However, due to the US banking crisis, Circle’s USD coin (USDC), the second largest stablecoin by market capitalization, temporarily lost its dollar peg in March. gathered.
Tether, which is based in the British Virgin Islands and Hong Kong and has shallow ties to American banks, has maintained a dollar peg and emerged as a winner. USDT’s circulation has increased by 24% this year, while most rivals have seen a significant decline.
｜Translation: coindesk JAPAN
｜Editing: Takayuki Masuda
｜Original: Tether Says It Will Buy Bitcoin for Stablecoin Reserves Using Realized Profits