Tether's Big Bitcoin Buy Makes It the Seventh-Largest Holder

Tether, the issuer of USDT, has recently acquired 8,888 Bitcoin, valued at $618 million, increasing its total Bitcoin holdings to 75,354. This purchase makes Tether the seventh-largest Bitcoin holder globally, demonstrating its commitment to diversifying its backing assets and growing institutional interest in Bitcoin ahead of the upcoming halving event.

Tether's Bitcoin Acquisition Bolsters its Position as Seventh-Largest Holder

April 1, 2024, 6:55 PM UTC

Tether Holdings Limited, the issuer of the widely used stablecoin USDT, has made a significant investment in Bitcoin, acquiring 8,888 Bitcoin worth approximately $618 million on March 31, 2024. This purchase elevates Tether's total Bitcoin holdings to 75,354, with an average acquisition cost of $30,305 per Bitcoin. The portfolio's current valuation stands at nearly $5.2 billion, as per recent on-chain data.

Tether's Bitcoin investment has yielded substantial returns, with unrealized profits exceeding $2.94 billion, representing an impressive 128% appreciation. This performance aligns with the growing institutional adoption of Bitcoin, driven by the approval of spot Bitcoin exchange-traded funds in the United States and the imminent Bitcoin halving event, which will significantly reduce the block reward in 19 days.

Tether's Bitcoin accumulation places it as the seventh-largest holder globally, surpassing Binance's cold wallet, which holds over 248,597 Bitcoin valued at $17.31 billion. This strategic move is part of Tether's broader plan to diversify its stablecoin's backing assets by allocating 15% of its net profits towards Bitcoin.

The USDT stablecoin recently achieved a significant milestone, surpassing a market capitalization of $100 billion on March 4, 2024, marking a 9% increase year-to-date. Tether's commitment to the Bitcoin ecosystem extends beyond its investment strategy, with the company planning to allocate $500 million towards Bitcoin mining, further strengthening its presence within the industry.

As Bitcoin's price hovers above $69,000, the market may have concluded a pre-halving correction phase. Since March 25, 2024, Bitcoin has maintained support above its previous all-time high of $69,000, despite significant options expiry events. Experts believe that the halving's impact may not be fully reflected in Bitcoin's price, with potential for further appreciation as the event nears.

Tether's Q4 2023 attestation report, conducted by global auditing firm BDO, reveals a record net profit of $2.9 billion. This surged Tether's excess reserves by $2.2 billion, bringing their total to $5.4 billion. The remaining profit was allocated to various project investments, such as mining, AI infrastructure, and P2P communications, which are not considered part of Tether's reserves.

BDO's attestation confirmed that Tether's $4.8 billion in outstanding unsecured loans at year's end were fully covered by its excess reserves. Tether emphasized its commitment to eliminating the risk of secured loans from its token reserves, addressing community concerns about this aspect of their portfolio.

Tether's substantial Bitcoin acquisition consolidates its position as a significant player in the cryptocurrency ecosystem. The company's strategic allocation of assets, coupled with its strong financial performance, demonstrates its confidence in the long-term value of Bitcoin and its commitment to providing a stable and reliable stablecoin backed by sound financial practices.