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Tether, the largest stablecoin issuer USDT, is following in the footsteps of Microstrategy to manage its reserves. The stablecoin issuer plans to bolster its reserves with Bitcoin and divest from US government debt.
In an announcement on May 17, Tether revealed that it plans to invest a portion of its profits into Bitcoin on a monthly basis. The firm has stated that it will “regularly allocate up to 15% of its net realized operating income to the purchase of Bitcoin (BTC).”
The announcement to buy Tether BTC comes a week after the company’s quarterly financial report, in which the stablecoin issuer posted a net profit of $1.5 billion.
According to the company, Tether will store all of its bitcoins in self-service. As of the end of the first quarter, he has $1.5 billion in bitcoin, which is about 2% of his total reserves. 85% of the assets were in cash, cash equivalents and other short-term deposits, mostly treasury bills.
Tether stated that BTC was the obvious choice as the original cryptocurrency has proven to be a long-term store of value. The stablecoin issuer cited the mammoth rise in the price of bitcoin over the past decade and its resilience to traditional financial setbacks for the decision.
Related: Circle CEO Blames US for Decline in US Cryptocurrency Market Cap
Paolo Ardoino, CTO of Tether, said in a statement that the world’s first and largest cryptocurrency is backed by its potential as an investment asset. He added that Bitcoin’s limited supply, decentralized nature, and widespread adoption have made it “the preferred choice for both institutional and retail investors.”
MicroStrategy has a similar Bitcoin investment plan in which they actively replace the US dollar in their Bitcoin reserve. Although Microstrategy does not have a fixed time frame for investing in BTC, Tether plans to do so by the end of each month.
