Tether, the issuer of the largest stablecoin Tether (USDT), is taking inspiration from MicroStrategy and diversifying its reserves using Bitcoin (BTC). The stablecoin provider has announced its plans to boost its reserves with BTC, shifting away from US government debt.
Tether has stated that it will allocate up to 15% of its net operating profits to purchase Bitcoin each month, with all BTC held in self-custody when acquired. In Q1 2023, the company held $1.5 billion in Bitcoin, constituting around 2% of their total reserves. However, 85% of its holdings were in cash equivalents, primarily Treasury bills.
Choosing to invest in BTC seemed an easy decision for Tether, given the cryptocurrency’s resilience in the face of traditional financial failures, mammoth price rise, and proven long-term store of value assets.
Paolo Ardoino, Tether’s chief technology officer, highlighted BTC’s limited supply, decentralized nature, and widespread adoption, making it a favored choice for both retail and institutional investors. MicroStrategy has a similar investment plan, regularly replacing USD with Bitcoin, while Tether plans to invest in BTC at the end of each month.
Related: Circle CEO blames US crypto crackdown for declining USDC market cap
Magazine: Unstablecoins: Depegging, bank runs, and other risks loom