Tether, known as the operator of the stablecoin USDT, has significantly increased its Bitcoin reserves, acquiring over 27,000 BTC in the last twelve months.
Overview of Tether's Purchases
According to data shared by CEO Paolo Ardoino, part of the acquired BTC went into USDT's reserves, while the majority was allocated to the investment fund Twenty One Capital, which Tether uses to manage long-term digital assets. This strategy provides the company with immediate backing for its stablecoin while also establishing a separate investment arm for long-term growth.
Investment Strategy and Policy
Under a policy established in May 2023, Tether allocates 15% of its quarterly profits to Bitcoin purchases. This approach has rendered Bitcoin a permanent fixture on the company's balance sheet, setting it apart from many peers in the fintech sector. However, this strategy has drawn skepticism, as critics point to changes in Tether's public asset disclosures, speculating that the company sold billions in BTC to purchase gold. Ardoino countered this by clarifying that coins had been moved into Twenty One Capital rather than liquidated.
Tether's Role in the Crypto Market
While Tether is globally recognized as the issuer of USDT, its substantial Bitcoin accumulation indicates a broader strategy. The company is positioning itself not just as a liquidity provider for crypto markets but also as a long-term investor with a structured treasury strategy. As ETF giants and corporate treasuries compete for supply, Tether's steady buying underscores the growing demand for Bitcoin beyond traditional investment vehicles.
In conclusion, Tether is solidifying its status as a leading corporate buyer of Bitcoin, demonstrating its commitment to long-term investment strategies and asset diversification.
