Tether, the issuer of the world’s largest stablecoin USDT, recently strengthened its Bitcoin investment by acquiring 8,888 BTC valued at $380 million.
This acquisition marks the company’s third-largest, following its second-largest purchase in March 2023 of 15,915 BTC. However, Tether’s largest purchase occurred in September 2022, doubling the March acquisition and totaling 33,980 BTC. After September, Tether has consistently purchased Bitcoin every quarter.
This move aligns with Tether’s strategy to continuously strengthen its reserves by accumulating Bitcoin. The company is further diversifying its portfolio positively for the crypto market.
Regular BTC investment
As of the end of March 2023, Tether held approximately $1.5 billion worth of cryptocurrency. This marks a $1.3 billion difference from its overall BTC holdings at that time.
Now, Tether’s total BTC holdings are up to 66,456 BTC, valued at $2.81 billion with an average purchase price of $42,353, according to BitInfoCharts data.
Blockchain analytics tool Dune Analytics reports Tether as the eleventh largest Bitcoin holder, with Microstrategy surpassing its holdings with over 189,000 BTC. The top 10 addresses include major crypto exchanges and governments such as Binance, Bitfinex and the U.S. government.
While Tether has not officially disclosed its Bitcoin addresses, Tom Wan, a research analyst from crypto-native platforms and TradFi support company 21.co, identified an address that could be Tether’s in August last year.
Tether has previously stated its intention to invest a portion of its profits in Bitcoin regularly, shifting its stablecoin reserves towards crypto and away from U.S. government debt. In response to inquiries, Tether CEO Paolo Ardoino restated the company’s announcement last year of its interest in purchasing Bitcoin with up to 15 percent of its profits every quarter.
The company is confident in Bitcoin as a compelling investment option, citing its impressive returns over the past decade. The world’s largest cryptocurrency has witnessed a remarkable 22,000 percent surge in the last ten years.
“Bitcoin has continually proven its resilience and has emerged as a long-term store of value with substantial growth potential,” Ardoino said. “Its limited supply, decentralized nature and widespread adoption have positioned Bitcoin as a favored choice among institutional and retail investors alike.”
Post-ETF approval BTC raise
Tether’s strategic Bitcoin acquisition also coincides with the crypto market’s excitement over Spot Bitcoin ETFs. The spot ETFs are recently approved by the U.S. SEC on January 11.
Prior to the spot Bitcoin ETF approval, Tether consistently increased its BTC portfolio. On top of its second-largest purchase last year, Tether also had an additional 4,083 BTC purchased between May and September.
The timing of Tether’s BTC acquisition suggests a proactive stance in seizing opportunities presented by the Spot Bitcoin ETF market and the upcoming Bitcoin halving in April.
Tether also actively engages in Bitcoin mining and energy production. In November, the company committed to invest $500 million over the next six months, focusing on constructing its Bitcoin mining facilities and acquiring stakes in other companies.
During the same period, Tether extended debt financing of up to $610 million to the publicly traded Bitcoin mining company Northern Data AG following its acquisition of shares in September.
Tether’s primary business revolves around operating the USDT stablecoin, which facilitated the generation of $3.2 billion in excess reserves as of September 30, 2023, according to the firm’s third-quarter attestation report published in October. The attestation report for Tether’s fourth quarter of 2023 is anticipated to be released in the coming weeks.