The Tether Transformation: Bucking the Trend
Tether, the well-known issuer of the largest stablecoin, USDT, is making quite the splash in the crypto pond. Rather than sitting idly by, the company is embarking on a new journey similar to MicroStrategy, opting to strengthen its reserves with the notorious cryptocurrency Bitcoin (BTC). Yes, you heard that right. It seems that Uncle Sam’s debts just aren’t cutting it anymore!
Diving into Bitcoin Investments
On May 17, Tether announced a bold move to allocate a monthly slice of its profits towards purchasing Bitcoin. In fact, they plan to funnel up to 15% of their net realized operating profits into this digital gold. That’s a hefty investment, right? Well, hold on to your wallets because Tether’s recent quarterly report boasted a plush net profit of $1.5 billion. Now that’s what we call a strong backing!
Bitcoin: The Resilient Gold of the Digital Era
Why Bitcoin, you ask? According to Tether, the king of cryptocurrencies has proven itself over the past decade as a long-term store of value. Not to mention, it has shown a remarkable ability to withstand financial crises. Tether believes that BTC is a reasonable choice and one that carries the added benefit of potential price appreciation. And let’s be real, choosing Bitcoin is like opting for a 5-star meal over a drive-thru burger—plenty satisfying!
Keeping Control: Self-Custody Practices
Unlike some treasure that gets buried under the sands of time, Tether intends to keep its Bitcoin stash in self-custody. As of the end of Q1 2023, the company reportedly had $1.5 billion in Bitcoin, making up about 2% of its total reserves. The remaining 85% is safely resting in cash, cash equivalents, and short-term deposits, primarily Treasury bills. Seems like they have their bases covered!
Joining the Ranks of Bitcoin Advocates
Tether’s CTO, Paolo Ardoino, has made it clear that Bitcoin is not just any random investment; it’s the crème de la crème of crypto assets. He cites Bitcoin’s limited supply, decentralized nature, and growing acceptance among both institutional and retail investors, setting it apart in a crowded field. Sounds like a solid sales pitch if you ask me!
The MicroStrategy Connection
Tether isn’t the only player hopping on the Bitcoin bandwagon. MicroStrategy has also been stacking Satoshis, replacing U.S. dollars in its reserves with BTC. While MicroStrategy is playing it loose without a fixed schedule for their investments, Tether seems to have locked in a monthly routine. Let’s see how this Bitcoin saga plays out in the months to come!
