Tether, the issuer of the largest stablecoin in the world according to market capitalization, USDT, has considerably expanded its Bitcoin portfolio. The company has established its rank as the 11th largest accumulator of Bitcoin. This move signals the company’s ambition to bolster its crypto portfolio by holding many of the most popular cryptocurrency tokens in the world.
Tether purchased 8,888 Bitcoin in the last quarter of 2023, valued at approximately $380 million. As a result of this latest purchase, the company increased the size of its Bitcoin holdings to 66,465 BTC, according to the data provided by Dune Analytics, which tracked the acquisition to an address associated with Tether.
Before increasing their Bitcoin holdings, Tether relied on investing in other forms of assets. Its preference was inclined more towards cash and assets like US treasury bonds to support the USDT stablecoin. The company began its initiative to invest in Bitcoin in May 2023, when it announced that it plans to allocate up to 15% of its profits to cryptocurrencies.
Not only is the move a departure from their usual strategy of supporting their USDT stablecoin with tangible assets, but it also highlights that the firm is showing increased confidence toward Bitcoin. As a company whose stablecoin’s market capitalization is more than $95 billion, it is a good sign for the crypto community that such a large organization is showing its trust towards Bitcoin, which has the chance to improve the general sentiment of the market.
The stablecoin issuer’s latest audit report showcases a varied portfolio, comprising $72.6 billion in government bonds and $1.7 billion in Bitcoin, alongside other investments. The company’s decision to venture into Bitcoin is viewed as a strategic move aimed at fortifying the support for its stablecoin and bolstering investor trust.
US Treasury bonds are long-term debt securities issued by the US Department of the Treasury to finance government expenditures. They are considered one of the safest investments globally, backed by the full faith and credit of the US government.
Investors purchase these bonds, lending money to the government for a fixed period, typically 10 to 30 years, in exchange for regular interest payments and the return of the principal amount upon maturity.
The Swiss-based company initially entered the realm of Bitcoin investments in September 2022, laying the foundation for subsequent expansions in its Bitcoin holdings. The firm’s increasing commitment to Bitcoin investment reflects a broader trend in the digital asset sector, where prominent entities diversify their investment portfolios by incorporating cryptocurrencies.
Tether has faced scrutiny regarding its financial practices, particularly concerning the quality of its assets. Recently, Howard Lutnick, CEO of Cantor Fitzgerald and a custodian for Tether, reassured skeptics about the legitimacy of its holdings, aiming to restore trust in its asset management.
Cantor Fitzgerald is a financial services firm known for its expertise in investment banking, prime brokerage, commercial real estate financing, and other financial services.
Established in 1945, it has become a prominent player in the global financial industry. Cantor Fitzgerald operates in various sectors, including equities, fixed income, and investment banking, providing services to institutional clients, corporations, governments, and individuals.
Additionally, the firm is recognized as a custodian for assets, managing and safeguarding financial holdings on behalf of clients.
The increase in the company’s Bitcoin holdings marks a significant development in the cryptocurrency world. As a major player in the stablecoin market, Tether’s investment choices could impact broader trends and investor confidence. By expanding its Bitcoin holdings, Tether diversifies its assets and strengthens its position in the digital currency landscape.
Tether’s move to increase its Bitcoin holdings reflects the growing integration of traditional finance and digital currencies. It suggests a future where digital assets play a central role in the financial strategies of large corporations and institutions as the cryptocurrency market continues to evolve.
