The largest stablecoin in the world’s history, Tether, will invest up to 15% of its revenues in bitcoin as it moves its reserves away from U.S. government debt and toward cryptocurrencies.
All of Tether’s bitcoin holdings will be kept in-house, the business announced in a statement. At the end of the first quarter, it owned $1.5 billion in bitcoin, or around 2% of its reserves. Cash, cash equivalents, and other short-term deposits, primarily Treasury bills, made up around 85% of the holdings.
The statement follows the firm’s quarterly financial report, in which the stablecoin issuer claimed net profits of $1.5 billion.
Tether will maintain sole custody of all of its Bitcoin, the company announced. It holds $1.5 billion in Bitcoin as of the end of the first quarter of 2023, or around 2% of its total reserves. Cash, cash equivalents, and other short-term deposits, mostly Treasury bills, made up 85% of the holdings.
Tether chooses Bitcoin for long-term value storage, mirroring MicroStrategy’s investment approach.
Tether has chosen Bitcoin as its preferred asset for long-term value storage, citing its significant price increase over the past decade and resilience against traditional financial failures.
“The world’s first and largest cryptocurrency is underpinned by its potential as an investment asset. Bitcoin’s limited supply, decentralized nature and widespread adoption have positioned it as a favored choice among institutional and retail investors alike.”-Tether CTO Paolo Ardoino
Tether’s CTO, Paolo Ardoino, highlighted Bitcoin’s potential as an investment asset due to its limited supply, decentralized nature, and widespread adoption among institutional and retail investors. This approach is akin to MicroStrategy’s investment plan, which involves substituting U.S. dollar reserves with Bitcoin, albeit without a fixed time frame, whereas Tether plans monthly Bitcoin investments.