Tether to Buy Bitcoin Based on Monthly Net Profits

• Tether, the company behind the largest stablecoin USDT, is investing a portion of its profits into BTC on a monthly basis.
• The decision was taken due to Bitcoin’s decentralized nature and its long-term store of value made it an obvious choice for the stablecoin issuer.
• At the end of the first quarter of 2023, Tether had $1.5 billion in Bitcoin on hand, making up around 2% of its total reserves.

Background Information

Tether, the company behind the largest stablecoin Tether USDT $1.00, has announced that it plans to strengthen its reserves with the help of Bitcoin BTC $27,401 and move away from United States-based government debts. According to a statement from the firm, it will “regularly allocate up to 15% of its net realized operating profits towards purchasing Bitcoin” at the end of each month. At the end of the first quarter of 2023, Tether had $1.5 billion in Bitcoin on hand making up around 2%of its total reserves.

Reasons Behind Decision

Tether cited several reasons for their decision regarding investing in BTC such as: Bitcoin’s decentralized nature and its long-term store of value made it an obvious choice for them; mammoth price rise over past decade; resilience against traditional financial failures; limited supply; widespread adoption by both institutional and retail investors alike etc.

Comparison with MicroStrategy

The announcement comes within a week after releasing their quarterly financial report where they reported net profitsof $1.5 billion dollars which is similar to MicroStrategy who also has a plan to replace U.S dollar reserves with BTC but unlike MicroStrategy they have fixed time frame for investment i..e at endof each month instead every quarter like MicroStrategy does .

Conclusion

In conclusion this move by Tether shows that cryptocurrency market is gaining more acceptance among institutional investors who are buying bitcoin as part of their portfolio diversification strategy thereby giving more credibility and maturityto cryptocurrency industry as whole .