Tether Invests 15% of Operating Profits in Bitcoin, Boosting Asset Reserves

Tether International Limited, the company behind the popular stablecoin, has announced its latest investment strategy aimed at strengthening its reserves portfolio. Beginning this month, Tether plans to allocate up to 15% of its net realized operating profits to purchase Bitcoin (BTC), the world’s first and largest cryptocurrency.

Tether already holds around $1.5 billion worth of BTC in its reserves, as stated in its Q1 2023 Assurance Report. Unlike many institutional investors, Tether takes possession of the private keys associated with its Bitcoin holdings, aligning with the philosophy “Not your keys, not your bitcoin.”

Under the new approach, Tether will focus solely on utilizing realized profits from its investment strategy, disregarding unrealized capital gains generated by price increases. This ensures a conservative and prudent approach, with the company considering only tangible gains from its operations.

According to Paolo Ardoino, the CTO of Tether, the decision to invest in Bitcoin stems from its strength and potential as an investment asset. Bitcoin has proven its resilience, emerged as a long-term store of value, and garnered widespread adoption among institutional and retail investors due to its limited supply, decentralized nature, and potential for substantial growth.

Tether believes that Bitcoin’s impressive track record of returns over the past decade, combined with increasing recognition and adoption by major financial institutions, positions it as a key component in diversified investment portfolios.

By incorporating Bitcoin into its investment strategy, Tether aims to capitalize on the digital asset’s growth potential while leveraging its position as a trusted financial infrastructure provider. This move also showcases Tether’s confidence in the cryptocurrency market and its commitment to supporting the broader ecosystem.

Apart from its Bitcoin investments, Tether Group is also focusing on smaller investments in communication technologies like Holepunch, energy, and bitcoin mining infrastructure.

Tether remains committed to stringent risk management practices to ensure operational stability and security. The company emphasizes its dedication to maintaining the stability of its flagship stablecoin, Tether (USD₮), while exploring innovative opportunities in the evolving digital asset landscape.

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