Tether’s Bitcoin Buying Spree Continues as It Becomes the 11th-Largest BTC Holder

Tether, the issuer of the world’s largest stablecoin USDT, has been accumulating bitcoin at a rapid pace, making it one of the biggest holders of the cryptocurrency. According to recent reports, Tether bought another 8,888 bitcoin for $380 million in the last quarter of 2023, bringing its total holdings to 66,465 BTC, worth over $2.8 billion at current prices.

Tether announced in May 2023 that it would start investing 15% of its net profit into bitcoin, as part of its strategy to diversify the reserves that back its USDT token. USDT is a stablecoin that aims to maintain a 1-to-1 peg to the US dollar, and is widely used in the crypto market for trading, arbitrage, and hedging.

Tether’s Bitcoin Buying Spree Continues as It Becomes the 11th-Largest BTC Holder
Tether’s Bitcoin Buying Spree Continues as It Becomes the 11th-Largest BTC Holder

Tether said that buying bitcoin would help it reduce its exposure to cash and cash-like assets, such as US Treasury bonds, which have low yields and are subject to inflationary pressures. Tether also said that it believes in the long-term potential of bitcoin as a store of value and a hedge against fiat currency devaluation.

In its latest attestation report, Tether revealed that it held $72.6 billion in government bonds, $1.7 billion in bitcoin, and $21.3 billion in other assets, including commercial paper, corporate bonds, precious metals, and reverse repo notes. Tether’s total assets exceeded its total liabilities of $95.3 billion, indicating that its USDT tokens were fully backed as of December 31, 2023.

How Tether Is Affecting the Bitcoin Market

Tether’s bitcoin buying spree has raised some eyebrows in the crypto community, as some analysts and critics have questioned the impact of its actions on the bitcoin price and supply. Some have argued that Tether is artificially inflating the demand and value of bitcoin, by creating USDT tokens out of thin air and using them to purchase BTC from the market. Others have suggested that Tether is manipulating the bitcoin market, by timing its purchases and sales to influence the price movements.

However, Tether has denied any wrongdoing, and has maintained that its USDT tokens are fully backed by real assets, and that its bitcoin purchases are transparent and legitimate. Tether has also received support from some prominent figures in the crypto industry, such as Cantor Fitzgerald CEO Howard Lutnick, who acts as a custodian for Tether, and who recently reassured skeptics that Tether’s holdings are legit and audited.

Tether’s bitcoin holdings also have some positive effects on the bitcoin market, as they indicate a growing adoption and acceptance of the cryptocurrency by institutional and corporate entities. Tether’s wallet address, which is associated with its bitcoin purchases, ranks as the 11th-largest holder of BTC, according to Dune Analytics. This puts Tether in the same league as other influential bitcoin holders, such as MicroStrategy, Tesla, Square, and Grayscale.

What’s Next for Tether and Bitcoin

Tether’s bitcoin buying spree shows no signs of slowing down, as the stablecoin issuer continues to generate profits from its USDT operations, and seeks to diversify its reserves and hedge against inflation. Tether’s bitcoin holdings could grow even further, as the company has also expressed interest in building bitcoin mining facilities in South America, as reported by Bloomberg in November 2023.

Tether’s bitcoin purchases could also have a lasting impact on the bitcoin market, as they could affect the supply and demand dynamics, the price movements, and the sentiment of the investors. Tether’s bitcoin holdings could also attract more attention and scrutiny from regulators, auditors, and the public, as the company faces ongoing legal challenges and investigations in several jurisdictions.

Tether’s bitcoin buying spree is a testament to the growing popularity and potential of the cryptocurrency, as well as the increasing role and influence of the stablecoin issuer in the crypto space. Tether’s bitcoin holdings could make it a major player and stakeholder in the bitcoin ecosystem, as well as a source of controversy and debate.

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