In the first quarter of 2023, Tether allocated a portion of its profits towards acquiring approximately 52,670 Bitcoins. According to Samson Mow, the CEO of JAN3, if Tether continues to maintain this accumulation strategy and pace, it could potentially surpass MicroStrategy and achieve an annual baseline of nearly 200,000 coins. This calculated move by Tether showcases its commitment to strategic investment and growth within the cryptocurrency market.
The Twitter user known as ‘girevik’, a financial analyst, has brought attention to Tether’s impressive Q1 earnings report, which shows a nearly $1.5 billion profit. According to the analyst, Tether’s revenue is generated through interest accrued on US treasuries, while depositors receive a 0% interest rate. As a result, the stablecoin issuer benefits from rising interest rates. This insight sheds light on Tether’s successful business model and highlights the importance of understanding the intricacies of the financial industry.
In summary, girevik has inferred that the Fed and US Treasury are subsidizing Tether’s Bitcoin acquisitions. Additionally, it has been observed that investors continue to favor investing in digital currency over traditional banking options, despite the availability of a risk-free 5% return through money market funds.
Girevik has presented compelling evidence of Tether’s stablecoin issuance growth, utilizing a screenshot from the esteemed crypto aggregation platform, CoinMarketCap. Despite the recent surge in interest rates, Tether’s stablecoin issuance remains unscathed, as demonstrated by the data.
Esteemed investor and visionary Lyle Pratt have offered a compelling response to Mow’s tweet, highlighting the immense influence that Tether wields as a Bitcoin whale. Pratt posits that the stablecoin issuer has the potential to establish a solid price floor for Bitcoin shortly, should they choose to do so. In support of this notion, Pratt references an earlier tweet proposing that Tether should publicly convert a portion of its treasury to Bitcoin. Such a move would undoubtedly significantly impact the cryptocurrency market, and Pratt’s insights serve as a valuable reminder of the power that lies within the hands of key players in the industry.
According to Pratt’s recommendation, Tether should consider utilizing up to 10% of its treasury, amounting to a substantial $7.5 billion, to safeguard against potential “banking shenanigans” that are expected to escalate. Tether has already invested $1.5 billion in Bitcoins, and Pratt is confident that they will invest the remaining $6 billion he has proposed. This strategic move will undoubtedly fortify Tether’s position and ensure its financial stability in the face of any unforeseen circumstances.
