Tether buys $618 million worth of Bitcoin, becomes 7th largest holder

abdelaziz Fathi

Tether, the company behind the popular stablecoin USDT, has expanded its Bitcoin holdings by acquiring 8,888 Bitcoin valued at $618 million on March 31.

S&P casts doubt on Tether's stability, USDT reserves

This purchase increases Tether’s total Bitcoin holdings to 75,354, acquired at an average price of $30,305 per Bitcoin, with the portfolio now valued at nearly $5.2 billion, according to recent on-chain data.

The company’s Bitcoin wallet has seen a substantial return, posting over 128% in unrealized profits, amounting to $2.94 billion. This performance comes amid growing institutional interest in Bitcoin, spurred by the approval of spot Bitcoin exchange-traded funds in the United States and the anticipation of the Bitcoin halving event, which will cut the block reward in half in just 19 days.

Tether now ranks as the seventh-largest Bitcoin holder globally, trailing behind Binance’s cold wallet, which holds over 248,597 Bitcoin worth $17.31 billion. This move aligns with Tether’s strategy to allocate 15% of its net profits into Bitcoin, aiming to diversify the stablecoin’s backing assets further.

The USDT stablecoin recently achieved a milestone, reaching a market capitalization of $100 billion on March 4, up 9% year-to-date. Moreover, Tether also plans to venture into Bitcoin mining with a proposed $500 million investment as it deepens its commitment to the Bitcoin ecosystem.

As Bitcoin’s price hovers above $69,000, the market may have concluded its pre-halving correction phase. Bitcoin successfully maintained support above its previous all-time high of $69,000 since March 25, even amidst large options expiry events. Experts suggest that the halving’s impact may not yet be fully reflected in Bitcoin’s price, with potential for further appreciation as the event approaches.

Tether reported a record $2.9 billion net profit for Q4 2023, according to its latest attestation report, conducted by the global auditing firm BDO. This profit boost has increased Tether’s excess reserves by $2.2 billion, bringing the total to $5.4 billion. The remaining profit was allocated to fund various project investments, including mining, AI infrastructure, and P2P communications. These investments are not considered part of Tether’s reserves.

BDO’s attestation confirmed that Tether’s $4.8 billion in outstanding unsecured loans at the year’s end were fully covered by these excess reserves. Tether expressed pride in having eliminated the risk of secured loans from its token reserves, a move in response to community concerns about this portfolio aspect.

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