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Bitcoin gets vote of confidence as a long-term store of value as Tether says it will buy more of the crypto to back its stablecoin

Tether logo in front of the Bitcoin logo
iStock; Insider
  • Bitcoin got a vote of confidence as a long-term store of value with Tether's new investment strategy.

  • The issuer of the USDT stablecoin will allocate up to 15% of its net realized operating profits to buying bitcoin.

  • Last week, Tether revealed that it held $1.5 billion of bitcoin in its reserves at the end of March.

Bitcoin got a vote of confidence as a long-term store of value after Tether said Wednesday it will buy more of the crypto to back its stablecoin.

The issuer of USDT said it will allocate up to 15% of its net realized operating profits to buying bitcoin, excluding unrealized capital gains generated by price increases.

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Tether, which held about $82 billion in reserves at the end of March, said its new investment strategy is meant to bolster and diversify its reserves.

"Bitcoin has continually proven its resilience and has emerged as a long-term store of value with substantial growth potential," said Tether Chief Technology Officer Paolo Ardoino in a statement. "Its limited supply, decentralized nature, and widespread adoption have positioned Bitcoin as a favored choice among institutional and retail investors alike."

Tether also said it will store and manage the bitcoin itself, and the purchased tokens will be in addition to the minimum assets kept in reserve to back USDT.

The bitcoin holdings also will not exceed Tether's shareholder capital cushion, which Ardoino said on Twitter stands at more than $2.5 billion.

Last week, Tether posted a first-quarter "attestation" that revealed it held $1.5 billion of bitcoin in its reserves at the end of March as well as $3.4 billion of gold.

But the vast majority of its reserves — $69.3 billion — is in cash and cash-equivalent assets like short-term US Treasury bills, which have been earning Tether billions of dollars as yields have surged over the past year.

Read the original article on Business Insider