Tether to use up to 15% of net profit to buy bitcoin for USDT stablecoin reserves

Stablecoin issuer Tether said Wednesday it will use up to 15% of its net realized operating profits to buy bitcoin ( BTC-USD ) in an effort "strengthen and diversify" the reserves that back its USDT ( USDT-USD ) stablecoin, according to a Wednesday release. The new investment strategy will take effect this month, the company said, noting its reserves already consisted of around $1.5B in bitcoin ( BTC-USD ). USDT ( USDT-USD ), mirroring the price of the U.S. dollar, is the largest stablecoin by market cap, with a circulating supply of $82.8B, according to data from CoinMarketCap. Traders use stablecoins, now a $130.2B market, to swap in and out of various cryptos without having to use fiat currencies. Furthermore, Tether said it will custody its bitcoin ( BTC-USD ) holdings without using third-party custodians, while quipping "Not your keys, not your bitcoin." According to its attestation report for the first quarter of 2023, Tether logged a record net profit of $1.48B, bringing its reserves surplus to an all-time high of $2.44B. That means the company will buy $222M worth of bitcoin ( BTC-USD ) as part of its new investment strategy, making it a major BTC holder. “Bitcoin has continually proven its resilience and has emerged as a long-term store of value with substantial growth potential,” said Paolo Ardoino, chief technology officer of Tether. “Our investment in bitcoin is not only a way to enhance the performance of our portfolio, but it is also a method of aligning ourselves with a transformative technology.” More on Stablecoins SEC said to be investigating if issuing stablecoins violates investor protection laws Cantor Fitzgerald reportedly manages over half of Tether's reserves Binance USD stablecoin hit with $500M in outflows after CFTC complaint