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Tether Announces Massive Bitcoin Purchase to Diversify Reserves
May 17, 2023
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With Tether's intention to invest 15% of its net profit, approximately $222 million, into Bitcoin, the company aims to bolster the assets supporting its USDT token, which maintains a 1-to-1 peg with the U.S. dollar.
Tether Bolsters Stability with Bitcoin Investment
Stablecoin provider Tether has announced its intention to acquire a significant amount of Bitcoin, worth hundreds of millions of dollars, to diversify the reserves supporting its world-leading stablecoin.
Tether aims to invest 15% of its net profit into Bitcoin to diversify the assets that back its USDT token, which maintains a 1-to-1 peg with the U.S. dollar. Based on Tether's most recent attestation report, this investment would amount to approximately $222 million.
It is important to note that Tether clarified the Bitcoin purchases would only represent a small fraction of its overall net profit, with the majority of excess income allocated to covering operational expenses, including bank fees. With a circulating supply exceeding $82.8 billion, USDT currently holds the title of the largest stablecoin in the market, outpacing competitors such as Circle's USD Coin and Binance's BUSD, according to CoinGecko data.
Tether's decision to bolster its reserves with Bitcoin acquisitions reflects digital assets' growing prominence and integration into the global financial landscape. By diversifying its reserves, Tether aims to strengthen the stability and credibility of its stablecoin while aligning with the increasing demand for cryptocurrencies.
Furthermore, this development follows Tether's recent disclosure that it holds over $1.5 billion worth of Bitcoin and $3.4 billion worth of gold among the assets backing the value of USDT and its other stablecoins. The majority of Tether's reserves, around 85%, consist of cash and cash-like assets, including U.S. Treasury bonds, according to its Q1 attestation for 2023.
Tether's move to diversify its reserves further solidifies the stablecoin's position in this rapidly expanding sector of the cryptocurrency market.
What is Tether:
Tether is the most widely adopted coin in circulation. USDT was the first-ever stablecoin introduced to the market. It is designed to peg its issued coin 1-to-1 with the Dollar. Tether was one of the first stablecoins issued in several blockchains, available on the Tron, ETH, Omni, EOS, Algorand, Solana, and the Binance Smart Chain (BSC) networks. It has received mass adoption as the reserve currency for most traders as it doesn’t fluctuate like typical crypto coins.
Learn more about Tether:
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Related News
Do Kwon Faces Extradition to the United States Over Terra Crypto Collapse
December 7, 2023
The decision, yet to be officially announced, follows the US Securities and Exchange Commission's (SEC) charges against Kwon for alleged crypto asset securities fraud.
Montenegro's Justice Minister is reportedly inclined to extradite Do Kwon, the founder of Terraform Labs, to the United States, according to a recent report from The Wall Street Journal.
Do Kwon, a key figure in the Terra blockchain ecosystem, is wanted by the United States and South Korea for his alleged involvement in the downfall of Terra's digital assets.
The decision follows Kwon's arrest in Montenegro last March. The collapse, which occurred in May 2022, triggered a broader market downturn affecting major players in the cryptocurrency space.
Legal Maneuvers and Extradition Talks
Kwon, who initially agreed to be extradited to South Korea, now faces the possibility of extradition to the United States. Montenegro's Justice Minister has privately communicated the decision to send Kwon to the US to answer charges related to financial crimes.
The specific charges include commodities fraud, securities fraud, wire fraud, and conspiracy to defraud and engage in market manipulation during Kwon's tenure at Terra.
Despite Kwon's earlier agreement for extradition to South Korea, the final decision rests with Justice Minister Milovic. The minister may await the outcome of a potential last-ditch appeal by Kwon against the court ruling.
Milovic emphasized that the decision would be made public "in a timely manner," leaving room for speculation on the intricate legal proceedings.
SEC Charges and Market Impact
The United States Securities and Exchange Commission (SEC) had previously charged Kwon with defrauding investors in crypto schemes in February. The legal action marked a pivotal moment, linking Kwon to allegations of orchestrating a multibillion-dollar crypto asset securities fraud.
In May 2022, Terraform Labs' collapse had a significant impact on the broader cryptocurrency market, impacting major platforms like Voyager Digital, BlockFi, Celsius Network, and FTX.
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Disclaimer: Overall it is vital to proceed with caution when purchasing tokens that have just been listed. For those who have not already read our articles on safety in the BSC it is crucial to reference the following items, HERE and HERE.
This is a paid press release, BSC.News does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. The project team has purchased this advertisement article for $1500. Readers should do their own research before taking any actions related to the company. BSC.News is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the press release.
This is a paid press release, BSC.News does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. The project team has purchased this advertisement article for $1500. Readers should do their own research before taking any actions related to the company. BSC.News is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the press release.
Disclaimer: Overall it is vital to proceed with caution when purchasing tokens that have just been listed. For those who have not already read our articles on safety in the BSC it is crucial to reference the following items, HERE and HERE.
This is a paid press release, BSC.News does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. The project team has purchased this advertisement article for $2500. Readers should do their own research before taking any actions related to the company. BSC.News is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the press release.
This is a paid press release, BSC.News does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. The project team has purchased this advertisement article for $2500. Readers should do their own research before taking any actions related to the company. BSC.News is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the press release.
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