Tether Adds $1 Billion in Bitcoin to Reserves

Tether has expanded its Bitcoin holdings through two significant transactions. The stablecoin issuer now controls 87,296 BTC worth approximately $8.9 billion.

The company has transferred the funds from Bitfinex’s hot wallets to its dedicated Bitcoin reserve address. Arkham Intelligence monitored the movements, which occurred in two stages. The first transaction involved the transfer of 961 BTC, valued at $97.18 million. A subsequent transfer brought 8,888 BTC, worth roughly $1 billion, into Tether’s reserves.

Source: Arkham Intelligence

The timing proves notable. Tether usually transfers Bitcoin to its reserve wallet at the end of every quarter. This mid-quarter acquisition is an indication of strategic opportunism. Bitcoin has fallen below the $ 100,000 price after consistent outflows from BTC and ETH exchange-traded funds. The token is currently trading at around $100,784 at press time, indicating a 2% decline over the last 24 hours.

BTC Price, Source: CoinMarketCap

Strategic Reserve Accumulation Shows Long-Term Conviction

In 2023, Tether implemented a systematic strategy of acquiring Bitcoin. The company allocates 15% of its net profits to developing its BTC reserves. This is a two-fold strategy to hedge against inflation and also to improve the balance sheet in support of USDT.

The reserve plan places Tether alongside high-ranking corporate Bitcoin holders. Strategy is on top with 641,205 BTC, worth $65.39 billion, or 3.053% of Bitcoin’s total supply. Other exchange-linked cold wallets, such as Galaxy Digital, are also among the major institutional holders.

Tether ranks in sixth position globally among all entities holding Bitcoin. In the case of private companies, only Block.one holds more than Tether, with 140,000 BTC. In the meantime, exchange-traded funds have the highest concentration and manage approximately 1,534,219 BTC, or 7 percent of the total supply.

The company’s Bitcoin holdings have resulted in a high unrealized profit. On-chain analysis reveals that the average acquisition cost of BTC is $ 49,121 per BTC, in addition to the reserve portfolio. Tether has over $4.55 billion in unrealized profits at the prevailing market values.

Dominant Stablecoin Position Funds Bitcoin Accumulation

The capacity of Tether to accumulate Bitcoin reserves is due to its dominant market position. USDT has a market capitalization of $183.3 billion, significantly surpassing that of other stablecoins. USDC comes second with a market cap of $75 billion.

The USDT distribution focuses on two major blockchains. Ethereum holds 47.92% of the aggregate supply, and Tron holds 42.08%. The presence of such a diverse range of chains solidifies the utility of USDT across various ecosystems.

Recent financial disclosures highlight Tether’s profitability. The company’s attestation report revealed that net profits exceeded $10 billion by the end of September. Total reserves reached $181.2 billion, offsetting liabilities of $174.4 billion, resulting in a $6.8 billion surplus.