Tether to Invest 15% of Its Operating Profit in Bitcoin Every Month

Tether is going to invest 15% of its operating profit in Bitcoin to strengthen its reserves. The step is taken following the previous investment of $1.5 billion to secure the net reserves. The managing team for Tether shared this news today on the 17th of May 2023 regarding its new strategy to purchase BTC with 15% of its net operating profit.

Tether’s Strategy to Strengthen Its Reserves

This month, Tether has planned to allocate 15 percent of its operating profit to purchase Bitcoin. The step is taken to make sure the safety and to strengthen the reserves of Tether International Limited. Tether is aimed to maintain the Bitcoin reserves in a supposedly consistent Shareholder Capital Cushion (SCC). Moreover, it predicted that it would diversify and strengthen the reserves.

During the first quarter of 2023, Tether allocated approximately 1.5 billion dollars to purchase Bitcoin by the end of March 2023. This is becoming a trend as many other institutions are already employing the same strategy to invest in Bitcoin to secure their reserves. There is a philosophy that goes by neither your keys nor your BTC has a certain impression for Tether as it holds keys and BTC holdings. By employing this approach Tether will focus on investing in Bitcoin by the realized profits. Moreover, it will disregard the capital profit to be gained by the price increases. This delivers the concept that it plans to get profit only in terms of tangible gains that are based on a few differences i.e., the difference between purchase and proceeding net worth at the sale.

Why Purchase Bitcoin?

Purchasing Bitcoin is Tether’s prudent and conservative approach to investment. This allocation of net operating profits aims to diversify and strengthen the reserves of Tether International Limited. It is believed that the allocation of these funds to buy BTC would help institutions to represent a clearer image of the performance of the firm. Moreover, it also aims to provide transparency to the clients regarding the investments and strategy for capital allocation.