Tether, the company behind the world’s largest stablecoin, has witnessed a significant increase in the value of its Bitcoin (BTC) reserves, surpassing $1 billion in profit. According to data accumulated by crypto analyst EmberCN, Tether currently holds 57,576 BTC, equivalent to approximately $2.4 billion, with an average purchase price of $22,480 per coin. This implies that Tether’s Bitcoin holdings have gained around 85%, or $1.1 billion, since their acquisition.
Tether’s Profits and Bitcoin’s Surge
The increase in Tether’s unrealized profit can be primarily attributed to the recent surge in BTC’s price. Bitcoin briefly surpassed the $42,000 mark before settling at its current price of $41,845. Over the past seven days, the cryptocurrency has experienced a 13.1% increase.
“Bitcoin has continually proven its resilience and has emerged as a long-term store of value with substantial growth potential,” Paolo Ardoino, Tether’s Chief Technology Officer, said at the time.
Tether’s decision to bolster its Bitcoin reserves is aimed at diversifying its holdings beyond cash and cash equivalents. By holding BTC and other assets, Tether aims to protect its reserves from the loss of purchasing power during prolonged cryptocurrency market downturns.
Tether’s Venture into Bitcoin Mining
Furthermore, the stablecoin issuer aims to invest half a billion dollars to become one of the world’s leading Bitcoin miners. The company’s investment strategy includes constructing its own mining facilities and acquiring stakes in other mining companies.
The new venture represents a significant departure from Tether’s primary business of running the USDT stablecoin, which maintains a one-to-one value with the US dollar. Tether generates revenue by managing a reserve of US Treasury bills and other assets backing the USDT stablecoin. As of September 30, the company had accumulated around $3.2 billion in excess cash.
“Bitcoin has continually proven its resilience and has emerged as a long-term store of value with substantial growth potential,” said Paolo Ardoino, Tether’s Chief Technology Officer.
It is worth noting that Tether is not the only entity reaping the benefits of Bitcoin’s surge. MicroStrategy, one of the largest institutional holders of Bitcoin, has also seen its unrealized profit soar to $2 billion. Led by CEO turned Executive Chairman Michael Saylor, the technology company initiated its Bitcoin purchases in August 2020. The company’s most recent acquisitions occurred last month, and as of November 30, MicroStrategy held 174,530 bitcoins acquired for $5.28 billion, with an average price of $30,252 per bitcoin.
