Tether Investing in Bitcoin: 15% of Profits to Buy BTC Monthly

• Tether, the company behind the largest stablecoin Tether (USDT), is planning to invest up to 15% of its net realized operating profits towards purchasing Bitcoin on a monthly basis.
• The firm said it will keep all of its Bitcoin in self-custody and has $1.5 billion in Bitcoin on hand, making up around 2% of its total reserves.
• Tether cited Bitcoin’s mammoth price rise over the past decade and its resilience against traditional financial failures for the decision.

Tether To Invest In Bitcoin

Tether, the company behind the largest stablecoin Tether (USDT), announced that it plans to invest a portion of its profits into Bitcoin (BTC) on a monthly basis. According to a statement from the company, this move away from United States-based government debts is meant to strengthen their reserves with BTC’s long-term store of value assets.

Investment Allocation

The stablecoin issuer plans to allocate up to 15% of its net realized operating profits towards purchasing Bitcoin each month and keep all of its Bitcoin in self-custody. At the end of the first quarter of 2023, it had $1.5 billion in Bitcoin on hand, making up around 2% of their total reserves. 85% was held in cash, cash equivalents and other short-term deposits, primarily Treasury bills.

Reasons For Investment

Tether cited Bitcoin’s mammoth price rise over the past decade and its resilience against traditional financial failures for their decision as well as Bitcoins limited supply, decentralized nature and widespread adoption which have positioned it as a “favored choice among institutional and retail investors alike” according to CTO Paolo Ardoino .

Similar Plans By MicroStrategy

This announcement comes within a week after MicroStrategy revealed they actively replace U.S dollars in their reserves with bitcoin which doesn’t have a fixed time frame but differs from tether who plan to do so at the end of each month.

Unstablecoins: Depegging Risks Looming

Despite such activities also come risks such as depegging or bank runs which leads us into Unstablecoins: Depegging Risks Looming article where readers can gain more information about these topics regarding cryptocurrencies investments .