Stablecoin issuer Tether has announced plans to buy Bitcoin at 15% of routinely generated operating profits.
Tether International Limited (Tether) is looking to further boost its reserves by purchasing Bitcoin (BTC) with its operating profit. that formal function It states that starting this month, the stablecoin company will regularly allocate up to 15% of its net operating profit made toward BTC purchases.
The report also states that Tether does not see current and future BTC holdings in its reserves as exceeding the shareholder capital cushion. Thus, the stablecoin issuer seeks to consolidate, grow, and diversify its reserves.
in that Warranty report for the first quarterTether revealed that its reserves were holding about $1.5 billion in BTC as of the end of March. The company also said that it holds the private keys associated with all of its bitcoin holdings.
Tether CTO Explains Bitcoin Buying Plan
Speaking about Tether’s decision to buy Bitcoin with the platform’s surplus funds, CTO Paolo Arduino explained:
“The decision to invest in Bitcoin, the world’s first and largest cryptocurrency, is based on its strength and potential as an investment asset. Bitcoin has consistently proven its resilience and emerged as a long-term store of value with significant growth potential.”
Arduino added:
“(Bitcoin’s) limited supply, decentralized nature, and widespread adoption have positioned bitcoin as a preferred choice among institutional and retail investors alike.”
Tether’s CTO also said that the company’s Bitcoin investment not only improves its portfolio, but also balances the stablecoin issuer with “transformative technology.” Arduino believes this revolutionary technology can restructure “the way we do business and live our lives.”
Tether said BTC’s impressive and sustainable track record underscores the investment potential of the leading digital currency. Moreover, the company noted that the growing recognition of cryptocurrencies has solidified its position as an essential component of diversified investment portfolios.
Tether will focus exclusively on deploying a profitable investment strategy to fuel the Bitcoin investment agenda. By ignoring the unrealized capital gains generated by the price, the company considers only tangible operating gains.
Planned Tether bitcoin purchases are part of a conservative and informed approach to investment decisions. Moreover, by routinely backing Bitcoin, the stablecoin issuer seeks to reflect the transparency and clarity of its capital allocation strategy.
Q1 2023 Verification Report
On Wednesday, May 10th, Tether’s escrow report showed surplus reserves at a record $2.44 billion. Moreover, the company recorded a $1.4 billion increase in net profit for the first three months of the year.
Tether ended the first quarter with combined total assets of $81.8 billion, with most of its investments remaining highly liquid.
Arduino was pleased with the company’s overall performance in the first quarter of 2023 and said Tether’s outlook for the second quarter is positive. The CTO added that the stablecoin issuer will monitor the risk-adjusted returns of the asset on an ongoing basis and adjust accordingly. Ardoino also reassured customers that Tether will not expose their funds to high-risk scenarios amid an uncertain global economy. The company seeks to compound what worked in the first quarter while exploring other key opportunities in the digital asset space.
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Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify cryptocurrency stories down to the bare essentials so that anyone anywhere can understand without much background knowledge. When he’s not deep into cryptocurrency stories, Tolo enjoys music, loves to sing, and is a movie lover.
