Tether Buys $705M Bitcoin, Expands Strategic Reserves

Tether, the issuer of the largest fiat-backed stablecoin USDT, has further solidified its position as a major Bitcoin backer with the acquisition of 7,629 BTC worth approximately $705 million.

According to on-chain data from Lookonchain, the Bitcoin units were transferred to Tether’s strategic Bitcoin reserve address Bitfinex’s hot wallet. This marks Tether’s largest Bitcoin purchase since March 2024, reinforcing its strategy to diversify its reserves with digital assets.

Bolstering Bitcoin Holdings

Tether’s Bitcoin reserves now stand at 82,983 BTC, which equates to around $7.68 billion at the current market rates. These holdings were acquired for $2.99 billion on average per Bitcoin at $36,125 per coin based on the information. The latest addition came as Tether revealed in May that it will use up to 15% of its profits to purchase bitcoins by May 2023.

This acquisition forms part of Tether’s plan to invest in various debt securities, and other assets that are not the US Treasury bills and cash, which dominate Tether’s reserves. The use of Bitcoin as part of the company’s reserve assets has been escalating over the recent past.

Tether’s attempt to reinvest its profits into long term assets show its commitment towards stability and search for new income generating opportunities.

“This landmark speaks volumes about our conviction in Bitcoin as a long-term strategic investment,” Tether’s management stated. “Our goal is to contribute to the overall growth of the cryptocurrency industry while at the same time maintaining healthy operations.”

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Previous Bitcoin Acquisitions

This December’s transaction comes as Tether’s third large Bitcoin purchase in the year 2024. The company bought 8,888 BTC in January at a cost of $379 million, which took its total holding to 66,465 BTC.

This was then succeeded by another massive buy of 8,888 BTC in April worth $600 million which took Tether’s reserves to more than 75,000 BTC.

Tether, for instance, has been buying Bitcoin during periods of market ranging to demonstrate a clear approach on how it is likely to make long term gains. These periodic purchases have put Tether in the list of the biggest institutional investors in Bitcoin where it is ranked the seventh on the global list based on on-chain data.

Implications for the Crypto Market

Tether has been buying Bitcoin at a fast pace at the most critical moment for the cryptocurrency market facing both the increased regulatory pressure and the lack of liquidity. This has come about after the USDT in circulation has reduced by $1.1 billion in the last few months, something that suggests a reduction in stablecoin liquidity.

Nevertheless, Tether’s investments in Bitcoin are strategic and show Tether as a highly vital part of the cryptocurrency market.

The company is increasing its balance of Bitcoin to diversify its exposure in times of economic volatility, and to ensure that it is better equipped to handle market volatility. Tether wants to buy and hold Bitcoin and help make the market more stable and liquid so more people will use decentralized finance.

This latest acquisition occurs as the European Union’s Markets in Crypto-Assets (MiCA) regulatory framework is being implemented which focuses on ensuring that the market is both fair and protects consumers. This has been evidenced by Tether’s ability to operate in the constantly changing legal frameworks of different countries, and at the same time, increase its Bitcoin reserves.

Looking Ahead

Tether’s Bitcoin reserves are now worth more than $7.6 billion and its latest purchase shows that it continues to regard Bitcoin as a sound store of value and a strategic investment for the future.

It has however disclosed intention of using future profits to increase its assets and spread its operations across other sectors.

More than 82,000 BTC remain in Tether’s reserves as the company remains firm on its commitment to long-term value generation in the digital asset market.