Tether, the issuer of the largest fiat-backed stablecoin USDT, further cemented its position as Bitcoin’s main backer by acquiring 7,629 BTC worth approximately $705 million.
According to on-chain data from Lookonchain, Bitcoin units were transferred to Tether’s strategic Bitcoin backup address Bitfinex’s hot wallet. This marks Tether’s largest Bitcoin purchase since March 2024, reinforcing its strategy of diversifying reserves with digital assets.
Strengthening Bitcoin holdings
Tether’s Bitcoin reserves now stand at 82,983 BTC, which equates to about $7.68 billion at current market rates. These holdings were acquired for an average of $2.99 billion per Bitcoin at $36,125 per coin based on information. The latest addition came when Tether revealed in May that it would use up to 15% of its profits to buy bitcoins until May 2023.
This acquisition is part of Tether’s plan to invest in various debt securities and other assets other than US Treasuries and cash that dominate Tether’s reserves. The use of Bitcoin as part of a company’s reserve assets has been escalating in the recent past.
Tether’s attempt to reinvest its profits into long-term assets demonstrates its commitment to stability and the pursuit of new revenue-generating opportunities.
“This milestone speaks volumes for our belief in Bitcoin as a long-term strategic investment,” Tether management said. “Our goal is to contribute to the overall growth of the cryptocurrency industry while at the same time maintaining a healthy business.”
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Previous Bitcoin Acquisitions
The December transaction comes as Tether’s third major purchase of Bitcoin in 2024. In January, the company bought 8,888 BTC at a price of $379 million, which increased its total stake to 66,465 BTC.
This was then followed by another large purchase of 8,888 BTC in April worth $600 million which brought Tether’s reserves to over 75,000 BTC.
Tether, for example, bought Bitcoin during the market-ranking period to show a clear approach on how it was likely to make long-term profits. These occasional purchases have put Tether on the list of the largest institutional investors in Bitcoin where it is ranked seventh in the global list based on on-chain data.
Implications for the crypto market
Tether has been buying Bitcoin at high speed at the most critical time for the cryptocurrency market in the face of increased regulatory pressure and lack of liquidity. This comes after USDT in circulation has decreased by $1.1 billion over the past few months, something that suggests the stablecoin’s liquidity has decreased.
Nevertheless, Tether’s investments in Bitcoin are strategic and show that Tether is a very vital part of the cryptocurrency market.
The company is increasing its Bitcoin balance to diversify its exposure in times of economic instability and to ensure it is better equipped to deal with market volatility. Tether wants to buy and hold Bitcoin and help make the market more stable and liquid so that more people can use decentralized finance.
This latest acquisition comes as the European Union’s regulatory framework for markets in crypto-assets (MiCA) is being implemented, which is focused on ensuring that the market is fair and protects consumers. This is proven by Tether’s ability to operate in the ever-changing legal frameworks of different countries, while at the same time increasing its Bitcoin reserves.
A look ahead
Tether’s Bitcoin reserves are now worth more than $7.6 billion, and his latest purchase shows that he continues to view Bitcoin as a good store of value and a strategic investment for the future.
However, he revealed his intention to use future profits to increase his assets and expand his business into other sectors.
More than 82,000 BTC remain in Tether’s reserves as the company remains steadfast in its commitment to long-term value creation in the digital asset market.
