The company paid approximately $45.4 million for the bitcoin, at an average price of $26,692 per bitcoin. Tether’s purchase of bitcoin is part of its plan to allocate up to 15% of its quarterly earnings to bitcoin, with the possible launch of a bitcoin spot ETF.
On August 3, Tether, the company behind the stablecoin USDT, revealed that it bought 1,529 bitcoin (BTC) in the second quarter of 2023.
The firm confirmed the purchase in a statement, saying it paid approximately $45.4 million to add the BTC to its balance sheet. That amount implies that they bought it at an average price of 26,692 USD per BTC.
Part of the Tether Investment Plan in BTC for 2023
The acquisition is part of Tether’s strategy to allocate up to 15% of quarterly earnings to Bitcoin. The company announced this plan in May and it is seen as a way to further diversify Tether’s reserves. The company’s CTO, Paolo Ardoino, has maintained a fairly positive stance on Bitcoin’s price appreciation over the next few years.
This is the second quarter where Tether adds a position in bitcoin (BTC) to its reserves. In the first quarter, they did not give information on the exact amount of bitcoin purchased, but they assured that it represented 2% of Tether’s reserves. In that quarter they reported 2.44 billion dollars in reserves, so that 2% would be approximately$ 49 million’s worth of BTC.
With these moves, it seems that Tether plans to apply the same bitcoin buying strategy as MicroStrategy, which, at the beginning of August, bought about 467 BTC, increasing its bitcoin reserves by more than 150 thousand BTC.
Tether Reports $1 Billion Earnings in Q2
At the end of July, Tether published its quarterly report on the reserves that the company manages and with which it supports USDT. In such a report, it is highlighted that most of the reserves are in United States treasury bonds, cash, and other similar financial instruments.
They emphasize that the company managed to collect profits in operations for more than $1 billion. Comparing the earnings with the previous quarter, it implies an increase of 30%, a remarkable gain considering that the industry is in a crypto winter.
These positive numbers, on the part of Tether, give more confidence to the USDT stablecoin. The stablecoin market is dominated by Tether for a reason. USDT’s dominance is 68% based on its market cap, followed by Circle’s USDC at 21% across all participating chains.
Bitcoin (BTC) Purchases by Tether Happen at the Right Time
This new Bitcoin purchase by Tether comes at a time when institutional interest in Bitcoin is growing. In June, the world’s largest asset manager, BlackRock, filed an application for a Bitcoin spot ETF.
Many other asset managers have also filed applications for bitcoin spot ETFs, and the SEC is expected to make a decision on these applications in the coming months.
Approving a Bitcoin spot ETF in the United States would be a huge boost for the Bitcoin market. It would make it easier for institutional investors to buy and sell Bitcoin, and would likely lead to increased demand for it.
The purchase of bitcoin by Tether and institutional investors is a positive development for the bitcoin market. It shows growing confidence in the first cryptocurrency, which could lead to further price appreciation.
By Audy Castaneda
