Blockchain-enabled platform Tether has announced an impressive profit of more than $1.1 billion from its Bitcoin holdings, thanks to the recent surge in BTC prices.
Tether’s lucrative Bitcoin investment strategy
Tether, known for issuing the USDT stablecoin, has made a substantial profit from its strategic Bitcoin investments. Chinese crypto journalist Colin Wu recently revealed that Tether had accumulated a total of 57,576 Bitcoins, valued at $2.4 billion, with an average acquisition cost of $22,480 per coin. Remarkably, 53,492 Bitcoins from this total were acquired before March 2023.
The significant surge in Bitcoin’s price, which recently exceeded $41,000, played a crucial role in Tether’s remarkable profit. Tether’s success can be attributed to its proactive approach to cryptocurrency investments. Starting in May 2023, the company began regularly purchasing Bitcoins using 15% of its net profits, resulting in the addition of 4,083 BTC to its portfolio.
Tether adopted a new investment strategy in May, which involved allocating “up to 15% of its net realized operating profits towards purchasing Bitcoin.” This move aimed to enhance and diversify Tether’s reserves. In its Q1 2023 Assurance Report, Tether disclosed that it held approximately $1.5 billion worth of BTC in its reserves at that time.
The decision to invest in Bitcoin was based on its perceived strength and potential as an investment asset, according to Tether’s Chief Technology Officer, Paolo Ardoino. He highlighted Bitcoin’s decentralized nature, limited supply, and global adoption, which have made it a preferred choice among both institutional and retail investors.
Bitcoin’s recent performance
Bitcoin has recently demonstrated significant growth in the cryptocurrency market. It is currently trading at $41,821.40, reflecting a weekly gain of 12.67%. With a market capitalization of $816.76 billion, Bitcoin maintains its position as the leading cryptocurrency.
Tether’s strategic investments in Bitcoin have yielded impressive profits, surpassing $1.1 billion. The company’s decision to allocate a portion of its net profits to purchase Bitcoin has proven to be lucrative, especially in the backdrop of Bitcoin’s recent price surge. As Bitcoin continues to make waves in the crypto space, Tether’s successful investment strategy serves as a testament to the cryptocurrency’s appeal as an investment asset.
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