Tether To Continue Buying BTC With Business Gains
A few weeks ago, the Tether network revealed that it was holding Bitcoin as liquidity backup for its native stablecoin, USDT. However, the latest news revealed that the firm plans to double its BTC investment by purchasing the primary crypto with its business gains.
According to the report, Tether’s CTO, Paolo Ardoino, revealed on May 17th that the firm plans to use 15% of its business profit to invest in Bitcoin assets. He added that the decision aligns with the firm’s aim to diversify its reserves to ensure stability.
The CTO added that Tether is not planning to sell any portion of its Bitcoin assets. In addition, he said that the firm has excess liquidity in its reserves than the value of BTC it is holding. Consequently, this gives the firm more stability and credence in the crypto market.
As per statistics released by the firm in March, Tether has about $1.5 billion in Bitcoin (52,600 BTC) in its reserves. According to analysts, if the firm’s BTC asset is consolidated in one wallet, it would account for the thirteenth-largest BTC holder globally.
Tether Wisely Chose To Store Profits In BTC
Paolo Ardoino dispelled the rumor that Tether recently stashed up a huge amount of BTC tokens in the first quarter of 2023. He corrected the notion as he claimed that the firm had been gradually buying its BTC for many quarters.
Commenting on Tether’s BTC acquisition, the CEO of Frax Finance, Sam Kazemian, believed Tether was making a positive and progressive move by buying BTC. He said storing some of their profits in BTC is a wise choice for stable coin issuers like Tether. He also hinted that Frax holds its profits in Ethereum but may likely invest in BTC in the future.
According to Kazemian, stablecoins provide colossal potential in the crypto industry. He believed the top stablecoin providers would be the Amazon, Google, and Apple of the emerging generation heralded by crypto technology.
Buttressing the CTO’s views, Tether reportedly recorded more profits in the first quarter of 2023 than han the likes of Paypal, Starbucks, and Netflix. In addition, the firm has been recording steady profit increments since March last year.
As of March 31, statistics revealed that Tether he over $53 billion in the United States treasury bills. This depicts that the firm has been receiving massive gains from its holdings of fixed revenue.
Kazemian Believes Stablecoin Issuers Would Always Thrive
Kazemian related that stablecoin issuers are always in profit whether there is market recession or inflation. He said if the economy is stable and rates are low, stablecoins increase in value. If there is a recession and rates are high, the US government pays stablecoin issuers.
Meanwhile, John Stark, a renowned cybersecurity professional, claimed that Tether indeed has more liquidity than it declared. Buttressing his stance, he said the firm is not registered under the US Security and Exchange Commission. Hence, Tether did not and was not obligated to declare all its assets when it disclosed its BTC holdings.
Although the USDT stablecoin issuer seems to be excelling and dominating the stablecoin market, it still faces several lewsuits. For instance, in 2021, Tether was fined a sum of $41 million by the CFTC (Commodity Futures Trading Commission) for falsifying the status of its USDT reserves.
In addition, the Wall Street Journal claimed that some firms that supported Tether used falsified credentials and shell firms to access bank accounts. However, the firm seems to withstand all legal brawls as it continues to grow rapidly in the crypto industry.
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