Tether’s Bitcoin Holding Profit Surges to $1.1 Billion as Leading Cryptocurrency Surpasses $42,000

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Tether, the company behind the world’s largest stablecoin, has witnessed a significant increase in the value of its Bitcoin (BTC) reserves, surpassing $1 billion in profit.

According to data accumulated by crypto analyst EmberCN, Tether currently holds 57,576 BTC, equivalent to approximately $2.4 billion, with an average purchase price of $22,480 per coin. 

This implies that Tether’s Bitcoin holdings have gained around 85%, or $1.1 billion, since their acquisition.

Tether @Tether_to 持有的 $BTC 目前已浮盈 11 亿美元(+85%)。

Tether 目前共计持有 57,576 BTC($2.4B)，综合成本 $22,480：
其中 53,492 BTC 为今年 3 月前储备，4,083 BTC 为今年 5 月开始使用 Tether 净利润的 15% 定期购买。

推文由 @Bitget_zh 赞助

Tether 相关公告https://t.co/XsThnRA6Bspic.twitter.com/hkvEt0JN6Z

— 余烬 (@EmberCN) December 5, 2023

The increase in Tether’s unrealized profit can be primarily attributed to the recent surge in BTC’s price. 

Bitcoin briefly surpassed the $42,000 mark before settling at its current price of $41,845.

Over the past seven days, the cryptocurrency has experienced a 13.1% increase.

Tether Allocates 15% of Net Profits to Bitcoin Purchase

In May 2023, Tether announced its plans to allocate up to 15% of net realized profits into Bitcoin on an ongoing basis. 

Despite Bitcoin’s volatility, the stablecoin issuer views it as a robust long-term investment. 

“Bitcoin has continually proven its resilience and has emerged as a long-term store of value with substantial growth potential,” Paolo Ardoino, Tether’s Chief Technology Officer, said at the time. 

Tether’s decision to bolster its Bitcoin reserves is aimed at diversifying its holdings beyond cash and cash equivalents. 

By holding BTC and other assets, Tether aims to protect its reserves from the loss of purchasing power during prolonged cryptocurrency market downturns.

Furthermore, the stablecoin issuer aims to invest half a billion dollars to become one of the world’s leading Bitcoin miners. 

The company’s investment strategy includes constructing its own mining facilities and acquiring stakes in other mining companies.

The new venture represents a significant departure from Tether’s primary business of running the USDT stablecoin, which maintains a one-to-one value with the US dollar. 

Tether generates revenue by managing a reserve of US Treasury bills and other assets backing the USDT stablecoin.

As of September 30, the company had accumulated around $3.2 billion in excess cash. 

Microstrategy’s Bitcoin Profit Surpass $2 Billion

It is worth noting that Tether is not the only entity reaping the benefits of Bitcoin’s surge. 

MicroStrategy, one of the largest institutional holders of Bitcoin, has also seen its unrealized profit soar to $2 billion.

Led by CEO turned Executive Chairman Michael Saylor, the technology company initiated its Bitcoin purchases in August 2020. 

The company’s most recent acquisitions occurred last month, and as of November 30, MicroStrategy held 174,530 bitcoins acquired for $5.28 billion, with an average price of $30,252 per bitcoin.

With Bitcoin reaching $42,000 earlier on Monday, the value of MicroStrategy’s holdings rose to approximately $7.3 billion, resulting in a profit exceeding $2 billion. 

Although the price has slightly retreated to $41,700 at the time of writing, it marks a significant milestone for Bitcoin, which hadn’t reached such levels since April 2022.

During the 2022 bear market, Bitcoin plummeted to under $16,000, causing MicroStrategy’s initial bet to be in the red. 

Nevertheless, Saylor continued to accumulate Bitcoin, financing the purchases through a combination of debt and equity issuance.

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