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Tether, the reserve manager of the world’s largest stablecoin USDT, has announced a new investment strategy aimed at strengthening its reserve portfolio. Tether will now regularly allocate up to 15% of its net realized operating income to buying Bitcoin (BTC). The move is expected to diversify Tether’s reserves, which currently hold about $1.5 billion in BTC.
Tether’s Q1 2023 Guarantee Report highlights the company’s commitment to maintaining a strong equity cushion while increasing its Bitcoin holdings. The report also notes that Tether takes possession of the private keys associated with all of its bitcoin holdings, reflecting the company’s “not your keys, not your bitcoin” philosophy.
Tether to Increase Bitcoin Reserves
According to the announcement, under this new approach, Tether will not account for unrealized capital gains from price increases and will focus solely on tangible profits from its operations. The Company will account for the difference between the purchase price and the net proceeds from the sale, or the amount of the consideration if the investment is redeemed.
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Paolo Ardoino, CTO of Tether, said that Bitcoin has consistently proven its resilience and has become a long-term store of value with significant upside potential. Bitcoin’s limited supply, decentralized nature, and widespread adoption have made it the preferred choice for both institutional and retail investors.
What’s more, Tether’s investment in Bitcoin is not just about improving the performance of its portfolio, but also about aligning itself with transformative technology that could change the way we do business and live.
In addition, Tether believes that Bitcoin has demonstrated its investment potential by demonstrating impressive returns over the past decade.
Bitcoin’s performance, coupled with growing acceptance and acceptance by major financial institutions, has cemented its position as a key component of diversified investment portfolios, reflecting the company’s confidence in the cryptocurrency’s long-term potential.
Moreover, Tether’s decision to allocate a portion of its net realized operating income to Bitcoin highlights the company’s confidence in the crypto market and its belief in supporting the wider ecosystem. The move is part of Tether’s strategy to diversify its portfolio of reserves and maintain stability in the ever-changing digital asset landscape.
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In addition to investing in bitcoin, Tether is focusing on building the communication, energy, and mining infrastructure for bitcoin. These investments are aimed at improving the company’s operations and supporting the wider ecosystem of digital assets.
Overall, Tether’s new investment strategy demonstrates the company’s commitment to transparency, stability, and prudent decision-making. By focusing on realized profits and increasing its presence in Bitcoin, Tether is looking to solidify its position as a leading player in the stablecoin market while maintaining a strong and diversified portfolio of reserves.
At the time of this writing, the largest cryptocurrency by market cap is currently trading at $26,800, down 0.8% in the last 24 hours.
Sideways BTC price movement on a 1-day chart. Source: BTCUSDT on TradingView.com.
Featured image from Unsplash, chart from TradingView.com
