Tether, a stablecoin company, has announced that it plans to allocate 15% of its earnings to invest in bitcoin. This decision follows Tether’s recent report confirming that it holds $1.5 billion worth of bitcoin reserves.
Tether’s Strategic Shift: Profits to Fuel Bitcoin Acquisition:
Tether, the company responsible for a popular digital currency called stablecoin, has shared its plan to buy bitcoin using the money it earns. In a recent blog post, the company announced that it will set aside up to 15% of its profits each month to purchase bitcoin. Tether believes that adding bitcoin to its reserves will help make them stronger and more varied, while also ensuring that it doesn’t exceed a certain limit called the Shareholder Capital Cushion.
Before the announcement, Tether released a report confirming that it owns $1.5 billion worth of bitcoin. Interestingly, the report also mentioned that a considerable portion of Tether’s reserves, around $3.39 billion, is invested in precious metals like gold and silver. In their announcement, Tether expressed their belief in bitcoin as a reliable and valuable investment. Paolo Ardoino, the company’s Chief Technology Officer, stated that their decision to invest in bitcoin is based on its strength and potential as an asset.
Tether executive added:
“Bitcoin has shown its strength over time and has become a popular way to store value for the long term. It has the potential to grow significantly. Bitcoin’s limited availability, decentralized system, and wide acceptance have made it a top pick for both big investors and everyday people who want to invest their money”.
Tether’s announcement comes at a time when its stablecoin called USDT is reaching its highest value in the market. On May 8, 2022, USDT reached a record high market cap of $83.279 billion. Currently, it is very close to that peak, valued at $82.67 billion. To keep the stablecoin issuer’s growth going, the company sees its decision to include bitcoin as a crucial move.
“On Wednesday, Tether stated that by including Bitcoin in its investment plans, they hope to benefit from the potential growth of the digital currency. They also believe that this move will allow them to utilize their position as a trusted and dependable provider of financial services”.
This information is for general knowledge only and should not be considered as advice for investing or making financial decisions.