Tether, the issuer of the leading stablecoin USDT, announced in its reserves report released last week that it holds $1.5 billion in Bitcoin, accounting for about 2% of its reserves . Just last night (17), Tether officially announced that it will regularly purchase more bitcoins.
Tether will use 15% of net profits to buy Bitcoin
According to Tether’s official tweet , the new reserve plan indicates that Tether will regularly use 15% of its net profit to purchase Bitcoin, which also belongs to Tether’s reserve assets:
Beginning this month, Tether will regularly allocate up to 15% of its realized net revenue profits to purchase bitcoin. These bitcoins should be considered as 100% backing Tether's minimum reserve assets.
If Tether's net profit of $1.48 billion in the first quarter is extrapolated, the company will spend about $220 million to buy bitcoin.
Tether will self-custody Bitcoin
Tether's blog details the purpose of this plan, which aims to ensure the stable peg of USDT to the US dollar through diversified reserve methods. At the same time, Tether stated that it will not choose to have Bitcoin assets managed by a third party:
Although third-party custody of Bitcoin is a common method for many institutional investors, Tether believes in "not your keys, not your Bitcoin", so it keeps its own private keys related to Bitcoin assets.
Paolo Ardoino, chief technology officer of Tether, also expressed excitement about the decision to invest in Bitcoin, and believes that in addition to economic considerations, this has also deepened the company's culture :
Our investment in Bitcoin is not only a way to improve the performance of our portfolio, but it is also a way to align us with a transformative technology that has the potential to reshape the way we do business and live our lives.
According to a previous report by the dynamic zone, Tether cut 90% of its bank deposits in the first quarter of 2023 after the turmoil in the U.S. banking industry, shrinking from $5.3 billion to $481 million, and instead increased its holdings of U.S. Treasury bonds. As of Q1, Tether has held Over $53 billion in national debt.
Further reading: Tether is afraid of bank thunderstorms! USDT Q1 reserves slashed by 90% of bank deposits, US debt broke 53 billion magnesium
